This Thursday didn’t start very good for Bitcoin investors, as the world’s biggest cryptocurrency, in terms of both price and market cap, plunged with 13.5 percent. According to The Guardian, everything was caused by the news that South Korea is planning to soon ban cryptocurrency trading.
However, the news of the possible ban came after local cryptocurrency exchanges were raided by police and tax authorities, as they were suspected of alleged tax evasion.
South Koreans are big fans of cryptocurrency
Currently, South Korea is one of the most important nations when it comes to demand for bitcoin, as well as many other virtual currencies, so it’s not surprising that they would be tempted by a clampdown.
“There are great concerns regarding virtual currencies and [the] justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges,” said South Korean justice minister Park Sang-ki.
As expected, this news brought Bitcoin price down with more than $2,000, alongside Ripple and other currencies, trading at less than $15,000 at midnight, before starting a slight recovery early in the morning. As for South Korea, the prices of the coin also plunged as much as 21%, after the official comments.
In order for this ban on cryptocurrency trading to happen, South Korea requires a majority vote of the total of 297 members of the National Assembly. The bad part is that this process can actually take months or even years.
If the ban will eventually be enforced, trading will become very difficult, but not impossible, according to chief analyst at EST Security, Mun Chong-hyun.
“Keen traders, especially hackers, will find it tough to cash out their gains from virtual coin investments in Korea but they can go overseas, for example, Japan,” he said.
Everybody wants a slice!
Right now, there are more than a dozen South Korea-based cryptocurrency exchanges, according to the country’s Blockchain Industry Association. Since January 2017, when Bitcoin began its 1,500% surge, a huge demand for the cryptocurrency was registered, coming from various social categories.
The fluctuation comes one day after Warren Buffet declared that he doesn’t plan to invest in Bitcoin or any other similar cryptocurrencies, also adding that all the popular assets are in for a big fall.