S. Korea is America’s vassal state in Asia. For months, Bitcoin had traded at a significant premium, which was rakishly dubbed ‘the kimchi premium’. Now it appears lawmakers in S. Korea are preparing a bill to ban Bitcoins, which is causing the cryptos to tumble this evening, in yet another Wagnerian styled drama which will ado to nothing.
South Korea’s justice minister said on Thursday that a bill is being prepared to ban all cryptocurrency trading in the country.
That news is a major development for the cryptocurrency space, as South Korea is one of the biggest markets for major coins like bitcoin and ethereum.
According to industry website CryptoCompare, more than 10 percent of ethereum is traded against the South Korean won — the second largest concentration in terms of fiat currencies behind the dollar. Meanwhile, 5 percent of all bitcoin are traded against the won.
“There are great concerns regarding virtual currencies and justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges,” Park Sang-ki said at a press conference, according to the ministry’s press office.
Bitcoin tumbled more than 12 percent following Park’s remarks, according to CoinDesk’s bitcoin price index that tracks prices from four exchanges. At 1:26 p.m. HK/SIN, the cryptocurrency price retraced some of its losses to trade at $13,547.7.
Park added that he couldn’t disclose more specific details about proposed shutdown of cryptocurrency trading exchanges in the country, adding that various government agencies would work together to implement several measures.
Reuters further reported that a press official said the proposed ban on cryptocurrency trading was announced after “enough discussion” with other government agencies including the nation’s finance ministry and financial regulators.
The news wire later added that once a bill is drafted, legislation for an outright ban of virtual coin trading will require a majority vote of the total 297 members of the National Assembly, a process that could take months — or even years.
Cryptocurrency trading in South Korea is very speculative and similar to gambling. Major cryptocurrencies like bitcoin and ethereum are priced significantly higher in the country’s exchanges than elsewhere in the world. For example, bitcoin traded at $17,169.65 per token at local exchange Bithumb, which was a 31 percent premium to the CoinDesk average price.
That difference in price is called a “kimchi premium” by many traders.
Well, when China slapped restrictions on the coin, prices tumbled — until they stopped tumbling and then tripled in a week. Is this the end for Bitcoin?
I can only hope so, this way I can get back to living a normal life of leisure and not obsessed with crypto proxies. However, something tells me this is fucking bullshit. I know these crypto traders and they’re the dumbest people om earth, accustomed to rudimentary forms of research that entailed reading company profiles and citing its market cap. And that’s it. Their form of investing is based solely on price action — gut feelings — and of course market cap.
A most ruinous reckoning will soon afflict these plebs, but not yet.If you enjoy the content at iBankCoin, please follow us on Twitter