With the news that South Korea is inspecting its 6 key financial institutions for compliance with anti-money laundering laws and speculation on China applying regulatory pressure to put a cap to cryptocurrency operation, the last 48 hours have been tough on the digital currencies with Bitcoin swinging back about 18% with the start of the week and Ripple falling by 35% post reaching a high level with a meteoric rise of 1000%. The key stakeholders speculated to come under pressure might be the miners dealing in cryptocurrencies in China and South Korea and the move is said to impose an orderly exit from their respective dealings. This has been under the purview to avoid any financial jerk to the economy post a cryptocurrency crash. Last year also, US Securities and Exchange Commission was gung-ho about cracking down on sale of digital token.
The whole scenario had led the market capitalization for cryptocurrencies wearing-out by over $100 billion in a single day. Thus, most of the currencies (seen to be trading as coins on www.coinmarketcap.com) were in red zone at the beginning of the week. The scenario in fact was reported to be plagued by Coinmarketcap.com’s move to exclude Korean pricing data for coins and this resulted in drop in prices along with the regular selling activity.
Further, the volatile scenario might also be aggravated by the introduction of bitcoin Exchange Traded Funds that have been talked about to provide double the returns on bitcoin price movement.
While melt-downs are expected for the cryptocurrencies this year as well given the regulatory uncertainties across the globe; the innovation in technology might come forward to partly save the loss. Nonetheless, various institutional and retail investors who have been tipped to barge in with buying of the digital currencies, might stay cautious amidst this volatile phase, at least in the short-term.
With the pendulum expected to swing back and forth, it is difficult to say that the fundamental blockchain technology would fail. In fact, this technology is empowering many financial institutions and other big players to set their operating systems and platforms. Ranging from IT, finance to healthcare, the technology is setting some breakthrough frames already in different verticals.
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