Tuesday, January 16, 2018 has been a complicated day for crypto-currency traders. Bitcoin, a pioneer in this market, fell by 18% during the day from $13,590 to $11,570. The Ethereum fell by 18%, the Dash by 21% and the Ripple by 40%.
According to analysts, this fall is explained by the tightening of regulatory authorities against crypto-currencies, particularly in South Korea and China.
In December 2017, South Korea banned financial institutions based in the country from trading in virtual currencies. The South Korean government is now considering banning all transactions in crypto currencies. This information was confirmed by Choi Jong-Ku ” The government has begun to discuss the possibilities of banning the exchange of crypto-currencies or prohibiting those that are subject to illegal practices “.
In addition, this ban may take a little time due to lengthy parliamentary proceedings in South Korea. This willingness of the government is driven by the strong fluctuations in cryptocurrencies that make this investment very risky. The year 2017 was marked by the bankruptcy of an exchange platform in this country following a piracy that subsequently caused a panic on the market.
China, for its part, will ban fundraising in crypto-currencies from September 2017. According to some sources, China would like to go further in this direction by prohibiting access to trading platforms for its residents. In addition, it wishes to limit “mining”. The Chinese government believes that in addition to increasing speculation, mining farms consume a lot of energy. The consumption of mining represents more than the consumption of a state like Hungary every day.
The Chinese government’s interventions in the cryptocurrency market are likely to be a major blow, in fact, 70% of mining volumes are made in China. In addition, government resolutions against this activity have led to a migration of farms to other, less constraining countries. Indeed, it is a very rewarding activity that encourages minors to continue their activities in other countries.
Paris and Berlin are also moving in the direction of regulating this sector. They announced that they will present joint proposals to the G20 Finance Summit to be held in Brazil in March. Through regulation, they wish to reduce the risk.