Bitcoin prices continued to plunge in Korea on Dec. 29 following more than 10 percent dip yesterday after the government announced it would adopt real-name transactions for cryptocurrency trading from January.
As of 3:30 p.m., Bitcoin was trading at 19.09 million won (US$17,900) at Bithumb, the nation’s largest virtual money exchange, down 4 percent from a day earlier, while other popular cryptocurrencies like Ether and Bitcoin Cash fell by 5 to 10 percent.
Korea’s fresh regulations also dealt a blow to Bitcoin’s international rates, with the US price dipping below US$14,000. But the figure on Dec. 29 (Korean time) recovered to US$14,853, up about 3 percent.
Despite the extended fall, the Korean price was still almost 30 percent higher than global prices, which local traders call “Kimchi Premium” mocking the speculative fever of the market that makes up more than a fifth of global trading.
On Dec. 28, the Korean government reaffirmed its hardline policy against virtual money trading. Under the new measures, anonymous trading will be banned from January and only real-name bank accounts and matching accounts at exchanges can be used for deposits and withdrawals.
The government also warned it could shut down exchanges if the toughened measures do little in cooling down the current investing frenzy.
Both investors and exchanges seem skeptical about a complete trading ban here considering daily transactions have already reached a whopping 7 trillion won. But they see a price adjustment unavoidable for some time.
“I think regulators have done what they’re supposed to do,” Cedric Jeanson, a former JPMorgan trader and founder of the bitcoin-focused hedge fund BitSpread, said of Korea’s latest measures in an interview on Dec. 28.
He added Bitcoin’s recent drop was largely expected, saying investors may see more and more volatility next year, given the lack of liquidity in the market.
By Lee Ji-yoon (firstname.lastname@example.org