Correction In Crypto Currency Markets Wipes Out Most Of Last Day’s Gains
The crypto currency markets had a slightly torrid day on Tuesday which got worse in the evening as almost every major crypto currency dropped in value by around 8%. After days of a bull run which propelled the price to around $41, Ethereum Classic lost considerably when its price dipped by about 11% on Tuesday evening to around $36 - still an excellent performance with profit taking probably the main issue here. Bitcoin had a good day on the whole when it punched above the $11,500 mark but fel back throughout the evening and was toying with the $11,000 mark, although it seems to be well supported at this level.
Another currency which appeared to be doing well on Tuesday was Litecoin , this reached the $240 mark but then fell back by about 8% during Asian market time indicating a sell off although the loss was only around 8%. Bitcoin Cash also posted a decline after having a relatively stable day - its price when down to around $1350 - also a drop of 8% overall. It seems that this currency is struggling to break through the psychologically sensitive $1500 mark which should see it eventually reach for the record highs that it achieved in December. However those heady prices seem a long way off now.
Other smaller currencies by market cap also saw steep declines with Stellar Lumens dropping by over 10% at one point and Neo seeing a relatively smaller 6% drop. Ethereum, which for the most part had been rather lagging behind while all other currencies recorded substantial gains, once again fell back to below $900 and was trading at around $880 at press time. Dash was flirting with the $750 mark but in the Tuesday evening retraction, it fell back to around $670 again thus falling behind the psychologically significant $700 barrier.
Ripple had a mixed day but also suffered with the correction since it briefly dipped below the $1 mark yet again and its average trading price was around $1.02. Although there has been a substantial amount of good press surrounding the currency, especially with agreements with banks, the price has remained extremely stagnant, varying from $1 to $1.15 over the past week. It remains to be seen whether the innovative crypto currency will test the highs that were seen last December and early January in the not too distant future but for now the die seems pretty much cast.
On the long term front, some recent developments have shown that crypto currencies are here to stay - at least for now. South Korea appear to be taking a much more positive stance towards the crypto market with encouraging signs that this will continue to grow exponentially after words of a ban only a few weeks ago.
The head of South Korea's financial regulator and watchdog has now confirmed the government will support cryptocurrency trading while encouraging banks to facilitate transactions with exchanges, effectively killing any fears of a rumored ban.
In intriguing remarks made on Tuesday, South Korea's Financial Supervisory Service (FSS) chief Choe Heung-sik said the government will back the cryptocurrency industry to develop in the country. Specifically, the official said the government will support "normal transactions" of cryptocurrencies, three weeks to the day after the government moved to curtail anonymous accounts trading in crypto markets in late January. As reported by Korean publication Yonhap, Choe told representatives from cryptocurrency exchanges in a recent meeting that the government "will support [cryptocurrency trading] if normal transactions are made", suggesting the government will encourage the growth of the industry under know-your-customer (KYC) transparency.
Korean regulators mandated the use of a real-name trading system from January 30 wherein cryptocurrency traders and investors are required to use their real names with their cryptocurrency exchange accounts or wallets and bank accounts, a move to put an end to the anonymous trading of cryptocurrencies. While anonymous account holders can continue to buy or sell cryptocurrencies using their holdings via virtual accounts, any new cryptocurrency purchases or withdrawals in fiat will require compliance with the new KYC rules.
Although a number of major banks began issuing new virtual bank accounts to cryptocurrency traders as a part of the real-name trading system, several local banks have reportedly been reluctant to follow suit with the government's intervention trading last month. To remedy the situation, Choe revealed the government will "encourage" banks to establish ties and engage in transactions with cryptocurrency exchanges. The reappearance of premiums on Korean exchanges have also added fuel to the fire for a surge in crypto prices although the retractions of the apst 24 hours have had a singularly tepid effect on the markets.