The Price Of Bitcoin Falls As South Korean Authorities Take Big Actions

In the last 24 hours, the market cap for crypto coins has fallen by more than a $100 billion. This was after authorities in South Korea revealed that they were carrying out investigations on the sixth largest financial institutions. The investigations would focus on whether they were in compliance with money laundering laws. After this announcement, the market for crypto coins fell from $853.6 billion to $710 billion in just 24 hours.

The Worst Hit

The world top 10 crypto coins were a sea of red after the announcement. Ripple; which has surged by over 1000 percent in previous years was leading in the race to the bottom. Its valuation had fallen by 29.5% in just 24 hours.

On January 4, the total market cap of Ripple was $140 billion. However, its value began to fall after commentators and investors began to reveal serious flaws in the business model on which it is based.

Another major loser was Bitcoin Cash. By yesterday, it had reached a top price of $3,071 due to a surge in trading in South Korea. However, 24 hours later, it was trading at $2,313.15, which represented a 20.5% drop in just 24 hours. The price of Bitcoin, which had hit $17,000 24 hours ago dropped by 12.7% to $14,108.

The Crackdown In South Korea

According to a report in the Wall Street Journal, the authorities in South Korea have begun onsite inspections to ensure that companies are complying with anti-money laundering laws. Besides that, the head of the South Korea Financial Services said he was drafting regulation for consideration by the National Assembly.

South Korea and Japan are some of the largest trading venues for crypto coins. In fact, trading as Bithumb is often cited as the reason for major price changes in Ethreum, Bitcoin Cash, and Ripple. Right now, it may seem like the crackdown is a bad thing. However, in time, it will help to clear up the crypto world for more investors and even institutional investors.

Most institutional investors are entrusted to use the funds of their clients to make a profit. However, they cannot invest in an investment, no matter how much potential value it might offer them unless there is clarity on legal issues. If the new regulations sail through the national assembly, it will make it easy to understand what they need to do. In fact, this could turn out to be something quite good for the crypto-coin world in coming months.

Betting On The Future Of Bitcoin

According to recent data, retail investors are 3.6 times more likely to invest in Bitcoin long term compared to institutional investors. These institutions are more likely to short bitcoin than retail investors are. However, when you check the trading volume of futures contracts, it is safe to assume that the prices of future have not had any impact on the spot exchanges of Bitcoin. Thus, they remain the primary drivers of its price.