Cryptocurrencies actually need allies, because various people from the financial world are attacking it from various sides. South Korea appears to be one of its allies, as it officially proclaimed that cryptocurrencies would be allowed in Korea from now on. These are such good news, but somehow, Ha Tae Keung, a member of the South Korean Bareun party, have expressed his discontentment regarding what the government did on Monday.
Why a Korean validation is a good news?
The value of a financial asset mainly depends on the trust people have in it. If everyone stopped believing gold has any value, such value would indeed drop down on a very fast pace, and the same things goes for Bitcoin and other cryptocurrencies. These virtual assets are recently under a nearly constant flow of attacks by important people from banking institutions, such as JP Morgan CEO. Most of them are saying that Bitcoin is worthless and has no future; they even go further, by saying it’s a dangerous asset that has to be stopped.
The South Korean acceptation of Bitcoin was more than positive for the cryptocurrency, and its value went up during the hour following the announcement. Because this country wasn’t either for or against the Bitcoin just a few weeks ago, the cryptocurrency market has been a bit shaky. It was even more the case when the Korean government said it would express its decision on Monday, 40 minutes before indeed doing so. It has caused a little panic among Bitcoins users, but everything went to normal once the South Korea’s position was made official.
Why Ha Tae Keung was unhappy with the government decision?
Ha Tae Keung described the government move as a maneuver made in order to generate fluctuations on the Bitcoin market. Indeed, thanks to their announcement of a soon proclaiming of their position on the Bitcoin, the markets went crazy for 40 minutes. Many people were afraid of Bitcoin being banned from the Asian country, because that would have resulted on a massive drop of its value. In consequence, these people sold massively in order to “cut their losses”, dragging down the price in the process.
Everything seems to indicate that this move was carried out with the aim of creating a bloody FUD (a big fall of the market place) in order to allow insiders, within the South Korean government, to speculate to their advantage. A dishonest practice that is to the detriment of investors who have not seen this coming, and who have decided to sell their bitcoins guided by impulse.
It appeared to be a bad decision in the end, because South Korea sided the Bitcoin, and the prices went back up, higher and higher. Many Korean investors lost a lot of money if they decided to sell before the announcement. Ha Tae Keung said the government proceeded that way in order to see the prices of the Bitcoin going down, so they could buy it at an affordable price. Some of those who knew in advance about this maneuver would have possibly did so.
Governments should be careful with their decisions
A government should indeed behave for the common good of its citizens. Directly saying they are backing the Bitcoin would have avoided a lot of people to panic and sell their precious Bitcoins. Of course, some experts knew in advance that the government would be on the side of the cryptocurrency, but not everyone took the best decision at the moment, and followed their survival instinct that told them to sell as fast as possible.
But in the end, it’s a good thing for Bitcoin in general, because it officially has the trust of a valuable ally that is South Korea. The country being against the Bitcoin can’t be used anymore as an argument against the cryptocurrency. Also, since a country is openly about to regulate the use of Bitcoin, chances are other countries might soon do the same.
Following this manipulation of the market, a wave (series or multitude or kyrielle) of bad news appeared keeping a state of fear within the marketplace.
However, in our humble opinion, which is under our sole responsibility, the biggest FUD problem (or should we call it danger) is not that the market is being manipulated by so called whales, groups of ‘pump and dumps’ on the telegram platform and even governments.
The biggest issue that could perpetuate this FUD would be that experts predict a massive fall of the bitcoin in 2018.
Please note that Julian Hosp has not yet predicted the fall of the Market Cap, but just of the Bitcoin …for now.