The price of bitcoin tumbled more than 11 percent on Thursday after the South Korean government once again expressed its intention to crack down on the cryptocurrency with new regulations. The government says it will ban anonymous crytpocurrency trading and may shut down noncompliant exchanges in an effort to curb financial fraud.
“Cryptocurrency speculation has been irrationally overheated in Korea,” the Korean government says in a statement. “We cannot leave the abnormal situation of speculation any longer.”
South Korea has become one of the global hubs for cryptocurrency trading. Some experts estimate that South Korea accounts for roughly a fifth of global cryptocurrency trading, trailing only the U.S. and Japan in volume.
Bitcoin trading has become so popular that it has gotten the attention of regulators across Asia. In September, Japan recognized 11 different cryptocurrency exchanges after requiring them to meet cybersecurity standards and verify user identity to prevent money laundering.
China has taken an even harder stance on bitcoin and other digital currencies. Prior to 2017, China accounted for as much as 90 percent of all global bitcoin trading. However, this year China banned initial coin offerings and shut down several popular exchanges. The China crackdown initially sent the price of bitcoin tumbling more than 40 percent back in September.
Bitcoin has a long and growing list of skeptics, including Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) CEO Warren Buffett, JPMorgan Chase & Co. (JPM) CEO Jamie Dimon and Nobel Prize-winning economist Robert Shiller. However, bitcoin bulls insist the currency’s 1,500 percent gain in 2017 is just the tip of the iceberg.
Standpoint Research analyst Ronnie Moas recently raised his 12-month price target for bitcoin to $28,000, the fourth time he had raised his target in four weeks.
“An argument can be made that bitcoin will be equal to gold within 10 to 15 years,” Moas says of bitcoin’s market cap. The global supply of gold is currently worth about $7 trillion, and Moas says bitcoin could hit $60,000 by 2022.
Bitcoin’s big Thursday drop is also dragging down the Bitcoin Investment Trust (GBTC) by 11.6 percent. The GBTC trust has become a popular bitcoin trading vessel for U.S. investors.
The Securities and Exchange Commission has…
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