Yesterday, on January 15, the entire cryptocurrency market recorded a massive decline in value, as bitcoin, Ethereum, Ripple, and other major cryptocurrencies fell amidst a major correction.
The cryptocurrency market lost $60 billion in market valuation, mostly due to the massive decline in the price of smaller cryptocurrencies in the market.’
The four cryptocurrencies recorded large gains over the past 24 hours, even throughout the period in which the vast majority of cryptocurrencies fell by big margins.
One similarity the four cryptocurrencies have with one another is that their trading volumes are somewhat concentrated in the South Korean and Japanese cryptocurrency markets, and the two markets have been demonstrating early signs of recovery from the recent cryptocurrency trading ban fiasco initiated by the South Korean government.
Bithumb, the second largest cryptocurrency exchange in the global market based in Seoul, South Korea, is processing $760 million worth of Qtum trades per day, accounting for nearly 60 percent of Qtum’s exchange market share.
Monero, the second largest privacy-focused anonymous cryptocurrency behind Dash, has also the majority of its trading volume processed in South Korea, on Bithumb and Korbit.
While major South Korean, Japanese, and US cryptocurrency exchanges have not integrated support for Cardano, its popularity in the Asian market has grown rapidly over the past few weeks. Cardano, or ADA, has been receiving more media coverage than major cryptocurrencies like bitcoin and Ethereum.
In South Korea and Japan, ADA is being acknowledged as a legitimate competition against Ethereum, given its proof-of-stake (PoS)-based blockchain protocol that supports decentralized applications.
However, apart from several cryptocurrencies, the cryptocurrency market is struggling to fully recover from the correction it experienced on January 15, which was triggered by the uncertainty in the cryptocurrency market in South Korea.
Once the South Korean cryptocurrency exchange market rebounds from the government’s premature statement on banning cryptocurrency trading, which has since been refuted by the Blue House, the executive office of South Korean President Moon Jae-in, the cryptocurrency market will likely increase in value at a rapid rate.
Still, in most major markets, bitcoin remains problematic for casual users and newcomers due to its high fees. Analysts expect the scalability issue of bitcoin and the congestion of the Bitcoin blockchain network to be resolved to a certain extent with the integration of Segregated Witness (SegWit) and batching transactions by major cryptocurrency exchanges such as Coinbase and Bitfinex.
Previously, Ledger, the cryptocurrency hardware wallet manufacturing firm, stated that SegWit can reduce bitcoin transaction fees by up to 40 percent, and through transaction batching, the Bitcoin blockchain network’s congestion could drop drastically.
Investors and users are highly anticipating the integration of SegWit and other innovative sealing solutions by the key players within the cryptocurrency market. But, if the transaction fees of bitcoin remain relatively high even after the integration of SegWit and efficient transaction batching systems, the market will react negatively to the progress.
As of current, bitcoin is still considered as the reserve currency of the cryptocurrency market, given its low volatility rate in comparison to other cryptocurrencies.
Featured image from Shutterstock.
Last modified: May 20, 2020 9:10 PM UTC