For the better part of a decade, cryptocurrencies continually crept their way into the modern-day economy. Then, Bitcoin unexpectedly blew up and those who got in early cashed in big time. All along the way, there were traditionalists that refused to succumb to the hype surrounding one of the most mysterious trends in recent memory. Now, it appears that those traditionalists such as Warren Buffet are beginning to be proven right, as cryptocurrency prices have fallen fast. In fact, Bitcoin is currently 40% lower than it was in mid-December. Other digital coins like Ethereum and Ripple have also experienced major slumps, as South Korea has been discussions about a ban on cryptocurrencies.
What Happened In South Korea?
After an announcement that coinmarketcap.com, one of the largest market price aggregators in the world, would no longer use prices from South Korean exchanges due to unreliable pricing, the South Korean Ministry of Justice had police raid various cryptocurrency exchanges. The afore-mentioned aggregator tweeted that the exclusion of South Korean pricing “was due to divergence in prices from the rest of the world and limited arbitrage opportunities.” The aggregator’s decision was certainly justified when Bithumb, a South Korean cryptocurrency exchange, traded at a massive premium to other exchanges. Following the raids, South Korea announced that it would begin discussions about banning cryptocurrencies all together.
How Does It Affect The Cryptocurrency Market?
Starting in Asia and accelerating in Europe, traders are beginning to sell-off all their cryptocurrencies. Bitcoin has fallen down to a 50% retracement zone at around $11,950, but traders worry that the market could see the cryptocurrency fall another 25% to around $8,500 in the coming months. Among the top eight cryptocurrencies, according to Market Capitalization, seven have seen more than a 14% drop since the turn of the calendar. Traders are trying to remain optimistic, but it looks like the digital currency age may be heading in the wrong direction.