Conflicting news out of Korea has played its part in keeping Bitcoin down, yet it has steadied.
After four days of straight losses from Monday to Thursday, Bitcoin seems to have leveled off somewhat. However, 2018 has not started well as this marks the second week in a row of poor performances.
While Bitcoiners have become accustomed to spikes and rallies, this flattening out of the price graph should still be seen as a positive. It comes over news of the South Korean justice minister’s backtracking of a proposal to ban local cryptocurrency exchanges in the country.
Regulators have long been behind the eightball when has come to controlling digital currencies as they work on a case-by-case basis. Time has now moved along swiftly as governments and officials have had their chance to put plans together which have affected the market.
A week of lows
The past four days have seen Bitcoin down as much as 23 percent at a point in his second week of 2018, but far from being a dip, it has been a steady decline – far more nerve-wracking.
Cryptocurrencies across the board have had some tough times in general, as Bitcoin price is inexplicably linked to most of the top altcoins.
Talks of a bear market brewing due to patterns derived in the graphs have many searching for answers as to why the cryptocurrency has taken such a plunge since the highs of mid-December last year.
One factor that has historically laid big blows on Bitcoin has been regulatory stirrings. The announcement by China that it would be banning ICOs and then following that exchanges, sent the market spiraling.
This week, there were similar fears realized – albeit falsely – when the South Korean Ministry of Justice announced independently that they would be banning trading in cryptocurrency. This was done without the consent of the Ministry of Strategy and Justice and other government agencies involved in the South Korean cryptocurrency regulation task force.
The market however reacted to the news which has since been clarified by the Blue House, the executive office and official residence of the South Korean President.
According to a spokesperson from the South Korean cryptocurrency task force, there are no plans to ban cryptocurrencies.
“The South Korean government has no other choice but to follow the regulatory frameworks and trends established by other leading governments. While there certainly exists a negative reputation attached to the cryptocurrencies, the government’s stance is to allow what has to be allowed, for the benefit of the South Korean market.”
China’s third strike
After banning ICOs, and then exchanges, Chinese regulators are now looking to go after miners in the Socialist Republic, a country that holds the majority of Bitcoin mining power.
The reason for China being a powerhouse of mining has to do with the cheap and often subsidized power, which miners tap into. The plans are now to make this essential power more expensive, cutting into the profit margins.
In the US, the SEC, which has had a bit of a history in the cryptocurrency space already, is starting to make a lot more noise in its attempt to regulate.
Fears of money laundering and the use of cryptocurrencies for other fraudulent uses, has seen Commodity Futures Trading Commission Chairman J. Christopher Giancarlo take up the mantle of federal overseer of digital currencies.
It’s only weakness
Regulators, even in China, have never been able to kill off Bitcoin. However, it is clear that they have a lot of clout when it comes to affecting the market price.
This latest bout of regulatory muscle-flexing shows that there is a need for some parity between the regulators and the digital currency economy before things can continue on their merry way.
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Author: Darryn Pollock