The market recovery was brief, as Korea sounded a hawkish message to Bitcoin exchanges this Thursday, but denying an outright ban on trading.
The cryptocurrency market is slowing down at the end of the year- but additionally, Korea sounded an alarming message that it would start regulating the activity of exchanges.
While Korea does not plan an outright ban, the regulations would involve only the creation of non-anonymous accounts with a KYC procedure, already in place in other regions such as the USA and Europe.
"The government had warned several times that virtual coins cannot play a role as actual currency and could result in high losses due to excessive volatility," reads the official statement of the Korean state.
Korean investors have drawn in the scrutiny, as a research showed more than 30% of employees have dabbled in Bitcoin. The concern of the authorities is mostly about personal finance, as trading cryptocurrencies can lead to fast losses. Korea has seen its share of previous speculative investments in traditional markets, and Bitcoin arrived just in time to take in the extra liquidity of a successful economy in the past few years.
But Korean markets are also overheated, moving separately and with premium prices on most digital assets. This irrational investment exuberance led to riots and a freeze in Bithumb, the leading Korean exchange, as Bitcoin Cash experienced a spike and drop in mid-November.
After the news, Bitcoin fell on selling pressure during the most active hours on the Asian markets, sliding to $14,478.50 before starting to bounce back.
Right now, the Korean Won trading is at its usual levels, but far outstripped by trading against USDT.
So far, KYC regulations have not stopped the rise of Bitcoin, and may only be a temporary glitch. But still, the pressures on the market are unnerving, as the BTC price stopped its climb at around $20,000 and has been depressed for weeks, bringing about worries of a bear market resembling 2013.
Bitcoin's dominance over the cryptocurrency market has shrank to 43.7% as altcoins are going their separate ways and in some cases, appreciating against BTC as alternative assets.===================
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