Bitcoin Crashes Below $12,000 As Korean Cryptocurrency Exchange Banhammer Looms
It helps to have nerves of steel when investing in cryptocurrencies, especially Bitcoin, which has seen some wild fluctuations over the year. Earlier this morning, for example, Bitcoin's value dived below the $12,000 mark, dropping 17 percent to a six-week low of $11,182.71. This recent slide comes after skyrocketing to more than $17,000 less than two weeks ago. A big reason for the dip is South Korea's hard stance on cryptocurrencies.
In a radio program interview, South Korean Finance Minister Kim Dong-yeon reiterated that "the shutdown of virtual currency exchanges is still one of the options." The remarks follow similar ones made last week when Justice Minister Park Sang-ki stated there existed "great concerns" over virtual currencies, and that the Justice Ministry was "basically preparing a bill to ban cryptocurrency trading through exchanges."
The Justice Minister's office later clarified that a ban had not yet been finalized, but was one of the measures being considered. Nevertheless, the consideration triggered a drop in Bitcoin's value, which at the time slid 14 percent to below $13,000. Today's remarks sent Bitcoin's value down even further, as this is the first time that Bitcoin has dropped below $12,000 per virtual coin since December 5.
Bitcoin has recovered somewhat and is now trading at $12,057.03 (at the time of this writing), but that is still down around 11 percent for the day. South Korea's stance is also affecting other cryptocurrencies. Ethereum, the second most popular virtual coin, dropped more than 20 percent to a 24-hour low of $1,030.12. At the time of this writing, it is at $1,139.66, down 11.7 percent. On Saturday, it was trading at $1,361.80.
It's hard to predict where Bitcoin, Ethereum, and other cryptocurrencies are headed. In the short terms, more declines could come as China cracks down on the virtual coin market. However, this is not the first time that values have seen a steep decline, only to eventually recover and hit new highs. Hence, the need for nerves of steel.