Cryptocurrency, Bitcoin was 4.8 percent higher at $13,875 on the Luxembourg-based Bitstamp exchange on Friday, January 12, after it skidded over 11 percent after the government of South Korea, a crucial source of global demand for cryptocurrency, said it was considering a plan to ban cryptocurrency trading.
In September last year, China cracked down on cryptocurrency trading, citing what officials saw as broader risks to the country’s economy.
As South Korea accounts for about 15 percent of global bitcoin trading, according to the website Coinhills.com, how regulators approach the issue will likely have international effects.
The local price of bitcoin in South Korea bounced back on Friday to 19.3 million won ($17,481.20) from as low as 17.5 million won ($16,445.82) according to Bithumb, the nation’s second-largest cryptocurrency exchange. On the Luxembourg-based Bitstamp, bitcoin stood at $13,709 after touching $12,800 the prior day.
Park Chong-hoon, an economist at Standard Chartered Bank in Seoul, said, “South Koreans find it hard to deal with the jealousy from watching their neighbours getting rich fast.”
It is a sentiment echoed by many. Scepticism of “get-rich-quick” schemes among South Korean officials has colored past forays by international finance into the country.
In the mid-2000s the U.S. private equity fund Lone Star faced raids of its offices and a years-long legal battle with the South Korean government after the foreign fund made millions of dollars buying and selling a controlling stake in a major South Korean bank.
That controversy, which raised concerns over South Korean money flowing to foreign entities, is probably among several factors making South Korea officials wary of managing the new breed of markets originated abroad, analysts said.
