Bitcoin and other cryptocurrencies have been facing some problematic weeks recently. In particular, South Korea's Justice Minister revealed that the country is preparing a ban on cryptocurrencies amid fears that they are used to avoid taxes and for illegal activities.
Though these plans have not been finalised the announcement has caused a massive ripple in the crypto economy with the global market cap for all currencies down from $830 billion to around $570 billion, a decrease of over 30%.
Bitcoin has fared marginally better with a drop of around 20% compared to yesterday.
It is just weeks after Bitcoin saw its meteoric rise to over $20k during the Christmas period, but since the start of the year, there have been multiple news stories negatively affecting it.
These stories include:
- Coindesk was caught up in an insider trading scandal
- China plans to stop people mining cryptocurrencies
- British MPs have said they want an enquiry over fraud fears
- Germany want sot to regulate Bitcoin
- France’s finance minister wants stricter rules for cryptocurrencies.
One could argue that this is not all bad news for Bitcoin, while it may suffer now, once regulations come into place to prevent fraud it will help establish itself even further as a legitimate currency.
All other cryptocurrencies have been facing similar price drops with Ethereum dropping from $1300+ on Monday to $1030 today.