The cryptocurrency market has begun to recover after the South Korean cryptocurrency trading ban controversy led the market valuation of cryptocurrencies to fall by more than $100 billion.
Almost immediately after the South Korea Ministry of Justice revealed its plans to continue drafting a cryptocurrency trading ban bill, the price of almost all cryptocurrencies in the global market plunged in value. Merely hours later, the South Korea Ministry of Strategy and Finance publicly stated that it does not support and agree with the cryptocurrency trading ban proposal by the Ministry of Justice.
“We do not share the same views as the Ministry of Justice on a potential cryptocurrency exchange ban,” said the Ministry of Strategy and Finance, as CCN.com reported today, on January 11.
Earlier today, 50 of the most valuable cryptocurrencies in the market demonstrated a large decline in value, with bitcoin and Ethereum falling by nearly 10 percent. Since then, within hours, the majority of cryptocurrencies have recovered in value.
With the exception of bitcoin, Ethereum, and Dash, the top 10 cryptocurrencies in the global market have increased in value.
Specifically, cryptocurrencies that are heavily concentrated in the South Korean cryptocurrency exchange market in terms of daily trading volume and user activity have recovered faster than others. Namely, EOS and Bitcoin Cash have recorded fairly larger gains over the past several hours.
Bitcoin Cash has increased by more than 6 percent, while EOS demonstrated a major price increase with a 20 percent surge in value.
The sell-off from investors in the South Korean cryptocurrency exchange market in fear of a potential cryptocurrency trading ban–which has now been debunked by the Ministry of Strategy and Finance–in conjunction with a major correction triggered by an exponential increase in the value of cryptocurrencies over the past two weeks have caused the cryptocurrency market to fall in value.
Given that the South Korean cryptocurrency exchange market is already recovering at a rapid rate, the global market will likely soon recover. The South Korean cryptocurrency exchange ban rumors led to a domino effect across all major regions and exchanges.
But, if the market recovers from the initial FUD on cryptocurrency trading ban, it is unlikely that the market will be impacted by the same piece of information in the mid to long-term. More importantly, the MSF has clarified its position on a cryptocurrency trading ban and the task force formed by the MSJ, MoJ, and other important government agencies has stated in late December that it will follow the regulatory roadmap of major regions.
“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,” a representative of the task force said.
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Last modified: May 20, 2020 9:11 PM UTC