Freshly out of the oven, another dip in the cryptocurrency market, following a dip when coinmarketcap.com has removed South Korean exchanges from its price calculations. Today, its South Korea’s government who’s driving the dip – announcing they are looking into regulating and potentially banning cryptocurrency trading in their country.
This could have a strong impact on the overall cryptocurrency market considering how many exchanges there are (Bithumb, Korbit, Coinone) and the volume of cryptocurrencies being traded in South Korea. According to various reports (like this one from Reuters), some exchange offices have been raided by authorities.
They also state that a ban will require a consensus vote by all 297 National Assembly, which might take months or years:
Once a bill is drafted, legislation for an outright ban of virtual coin trading will require a majority vote of the total 297 members of the National Assembly, a process that could take months or even years.
Earlier dip was caused by coinmarketcap.com removing South Korean exchanges from price calculation (indicated by an asterisk next to the currency pair codes) – reason being that because of strong demand, the prices were usually 30% higher than in the rest of the world.
Such turmoil is to be expected in the most disruptive and volatile market today – therefore don’t panic. It will calm down and stabilise. In the long run, this is just a minor bump on the road. If you have invested and your portfolio is diversified, you might see a dip in all prices temporarily, but this shouldn’t be a reason to sell and close your positions.