Over the past week, investors in cryptocurrencies such as Bitcoin have seen quite the dramatic dip, watching the world’s largest cryptocurrency lose approximately 50% of its value from a peak seen just a month earlier when Bitcoin (BTC) prices hit $20,000 U.S.
As of late Thursday, the cryptocurrency was trading in the $11,000 U.S. range as investors continue to weigh the potential long-term effects of comments from South Korean and Chinese regulators.
This past week, the South Korean justice minister made his proposal to ban cryptocurrencies such as Bitcoin public, igniting a global discussion on how governments will choose to either accept and regulate, or potentially vilify, cryptocurrencies around the world.
While cryptocurrencies inherently take the position that no government force can interfere in their existence, the prevalence of trading exchanges and other methods of transferring currency to cryptocurrency remain a topic of concern to many; if cryptocurrencies become less available to every-day investors, the thesis is that the long-term value of said “asset” is reduced over time.
While South Korea and China are not the first countries to display concern over how cryptocurrencies may be involved in activities which are detrimental to the economy and the environment, South Korea remains one of the world’s biggest markets for Bitcoin and its fellow digital coins, providing near-term headwinds to any sort of accelerated rally.
With great volatility comes great potential for astronomical returns, as well as great downside risk – investors ought to choose those investments which suit their respective risk profiles.
Invest wisely, my friends.
