By Guest Author
First, it was the Chinese ban that made cryptocurrencies’ prices go down. That event precipitated in the second half of 2017. Nevertheless, Bitcoin and cryptocurrency prices eventually went up even stronger than before. Now, 2018 has only seen a few days go by when the ‘Korean ban’ sent Bitcoin’s price tumbling down by more than 10%. This has resulted in turmoil that has the makings of an Asian tsunami. Korean government officials eventually had to soften their tone on the Bitcoin issue. This has left many Korean Bitcoin investors in a state of limbo. The question of ‘should they sell’ or not, impinges the minds of many. But it also puts media coverage of Bitcoin into question.
The Skittish Bitcoin Markets
In a highly speculative and volatile market where everybody can join, almost everybody has a stake in Bitcoin’s price. Even CNBC’s Brian Kelly is holding ‘How to buy Ripple’ video classes using their network. Social media has seen its share of tweets, news and videos either promoting or denigrating a specific coin’s value. Even new people who are not knowledgeable on the workings of even the basics of blockchain technology have their own opinions. It would have been acceptable, save for the sharing power of social media. A single tweet made by a nominally authoritative person could rock the market downwards. The tweet only needs to contain all the necessary ingredients for a FUD piece (Fear, Uncertainty and Doubt). Fear marketing can have viral real world consequences.
After news of the Korean ban spread, over 100,000 people signed a petition asking for the resignation of Korean officials. Calls mount for the impeachment or removal of Korea’s minister of justice and minister of finance. The ministries have conflicting point of views regarding Bitcoin and cryptocurrency exchanges. Both share a lack of concern for their voice’s impact on the cryptocurrency markets.
The Justice Minister Park Sang-Ki, views Bitcoin in a negative light. The Minister of Strategy and Finance Kim Dong-yeon, views it in the light of innovation. South Korea, like many other nations does not want to be left behind the train of innovation. Experts call for calm and more prudence on the part of various ministries. Hundreds of billions of dollars move back and forth in the Korean cryptocurrency exchanges. It is therefore probable to already call it an industry of sorts.
Why is South Korea so Important?
In contrast to China, South Korea has a democratically elected government. Decisions are supposedly ‘of the people, by the people and for the people’. Although China adopts the same mantra, it has traditionally been the Communist Party of China that shapes its ‘democratic processes’.
If South Korea pursues a Bitcoin ban in one form or another, it could be a litmus test of sorts. Libertarians note that bitcoin and decentralized apps are immune to these government intrusions. There are ways to circumvent these such as through decentralized exchanges. Koreans could resort to exchanging person to person via their smartphone apps. But in a way, these regulations could stymie the growth of a promising sector that could very well change the world. Other democratic countries that are adopting a ‘wait and see’ attitude could follow suit. Bitcoin’s growth could be stymied at least in the Korean peninsula.
Traders and analysts are still watching as events unfold. Nobody knows for sure when Korea would issue a blanket ban on Bitcoin. In a climate of uncertainty, the most astute traders know the value of preparing for the unexpected.