Bitcoin has continued to fall in value today, finding itself below $14,000. This drop began ten days ago, with a few increases before continuing its decline.
Adding to the decline of Bitcoin is the problem faced by South Korea this week. After trying to fend off several hacking attempts unsuccessfully during the past few months, the government is considering options to limit the cryptocurrency frenzy. One option is to shut down at least a few of the exchanges.
After South Korea shared this information, Bitcoin dropped to a value as low as $13,500. It is currently down by 30 percent from its record value of almost $20,000 in mid- December.
Bitcoin’s sudden drop began soon after futures contracts began trading on CME Group’s exchange, allowing investors the opportunity to bet on the cryptocurrency’s future value. Some investors have now expressed concern following South Korea’s news. The country has experienced a surge this year in Bitcoin activity, causing the nation’s prime minister to become concerned about the welfare of the nation’s youth.
South Korea will most likely not shut down the exchanges that account for over a fifth of global trading, but its warning is a wake-up call. According to a statement delivered by the Office for Government Policy Coordination, the country plans to track exchanges by requiring real-name transactions and imposing a ban on the offering of virtual accounts by banks to crypto-exchanges, according to a statement from the Office for Government Policy Coordination.
In Seoul, Bitcoin is trading at around a 30 percent premium above prevailing international rates, continuing proof of the country’s obsession with the digital currency.
South Korea’s government has stated, “Cryptocurrency speculation has been irrationally overheated in Korea. The government can’t leave the abnormal situation of speculation any longer.”
In Singapore, the monetary authority recently warned digital currency investors that they should be aware they are at risk of losing all the money.
Stephen Innes, head of trading for Asia Pacific at Oanda, explained, “Regulators are getting so concerned that this is primarily and predominantly a retail phenomenon. Regulators, not only in Asia but globally, are going to start addressing this fact, because I don’t think they’ve actually come to terms with what the absolute downside of a complete drop in crypto means for the economy.”
Across the globe, many countries are experiencing similar situations with cryptocurrency, and continued attempts to regulate the money have many investors concerned about its future, because many find its lack of regulation to be one of its most appealing traits.