On Monday, a major price spike for the cryptocurrency bitcoin rattled South Korea regulators. The spike was a reaction to the United States’ decision to greenlight bitcoin future trading on the Chicago Board Options Exchange (CBOE).
The controversial derivative started trading on Sunday.
On Monday, the bitcoin price soared to $17,900 which marks a 35.8% increase from the day prior. In South Korea, the crypto currency’s price stabilized at a level 10% higher than the global average so experts deemed it highly speculative.
Prof. Hong Ki-hoon who teaches business administration at Hongik University noted that the cryptocurrency has morphed into a tool for speculative investment. But this doesn’t make it a boon to markets, as the price can crash spectacularly.
On South Korea markets the price has already gone down nearly 30 percent amid rumors that the government is working on outlawing bitcoin-related activities in the near future.
On Sunday, reports of a bitcoin scam pushed the price even lower before Monday. A high school student tricked South Korea’s cryptocurrency communities that bitcoin platinum was working on a new coin. After the price of the digital coin plunged, the student “took margins” from speculating on the plunge.
Bitcoin platinum issued an official response, saying that the images were doctored.
S. Korea Bans Bitcoin Futures, Exchanges to Be Shut Down
In South Korea, virtual currencies are being traded on three major exchanges, Coinone, BitHumb, and Korbit. These three marketplaces account for 25 percent of bitcoin transactions in the world.
However, the agency that oversees the nation’s exchanges has taken bitcoin futures off the menu, saying the cryptocurrency is a “non-financial” means of investment.
The Korean government is reportedly working on legislation that will outlaw bitcoin exchanges for holding illegal fundraisers. The crackdown on the exchanges is expected to start this week. One government official said the exchanges are as toxic as “pornography suppliers”.
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