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Cryptocurrency shows signs of collapse

Posted May. 25, 2021 07:35,   

Updated May. 25, 2021 07:35


The cryptocurrency market is being driven deeper into a whirl of confusion as almost all types of coins have dropped in value day after day, causing the global market capitalization to cut sharply by more than 1,100 trillion won over the recent two weeks. Top coins such as Bitcoin and Ethereum have halved in market prices since the beginning of this month. With Washington and Beijing ready to impose strict regulation, some even project that the decline of cryptocurrencies is only the beginning of a bubble burst. In the meantime, the South Korean government, not as nimble as overseas authorities, sit on its hands, only inciting a flock of speculators. It may be only natural that wild speculators and an irresponsible government are criticized for fueling the e-money crisis.

Chinese Vice Premier Liu Hu said on Friday evening that Beijing bans not only transaction but also mining of Bitcoins. The day earlier (local time) the United States announced to make it obligatory to declare e-money transactions if they are involved with more than 10,000 dollars. With different levels of regulation, the top two powerhouses have just started wrangling cryptocurrencies.

JobCoin and other Alt-coins account for as high as more than 90 percent of the total trades in the South Korean market. It is a fact that cryptocurrencies are traded with a market capitalization of hundreds of billions of dollars among South Korean investors although designed by overseas paper companies with only an equity of several thousand won. Even when global cryptocurrencies dropped in value on Friday, so-called “kimchi coins” transacted domestically increased in prices several times overnight, only increasing suspicions of market rigging.

Even with an alarming sound spreading across the market, a growing number of investors have entered the e-money market. Two-fifths of 1,855 employees answered that they engage in cryptocurrency transaction, according to a job recruitment website. Investors on military duty are nicknamed “soldier ants.” It is said that many retirees have poured severance pays into e-money. That is, they are taking the highest risk by endangering what has to be the safest money ever of their lifetime. Experts concern that debt-ridden investors are likely to depend on high-risk-high-return items such as JobCoin to make up for a loss.

Some say that the depreciation of e-money is not experiencing a bubble crash but seeing price adjustments. Others argue that it is the golden chance to get a bargain. However, the coin market shows an extreme level of fluctuations of 30 to 40 percent a day. It should be kept in mind in such a critical moment that investment is individual responsibility. The South Korean government should not merely criticize cryptocurrencies for “inadmissible currencies” repeatedly but come up with even a minimum level of measures to ban price rigging and other market schemes.