The crypto crackdown continues, is the next ban going to happen in South Korea?
As we know, South Korea is where most of the volume from Bitcoin is coming from. We also know that as the price of Bitcoin rises there seems to be pressure from certain traditional entities to slow the "overheating" of the Bitcoin price. These traditional entities are often high up in the traditional banking or and finance sector and often operate under the impression that they are protecting ordinary folks. The question of protection is important if too much of an economy goes into crypto too fast because a crash could wreck the economy. At the same time there is the question of opportunity and too much regulation stifles opportunities for the ordinary person to get ahead in a competitive market and or competitive world in general.
The Bitcoin Futures are a double edged sword as well. Some like the concept of shorting and will try to use Bitcoin Futures to suppress or manipulate the price of Bitcoin. The problem here is that there are other coins and likely if the price of Bitcoin is suppressed by any mechanisms such as these then the value will simply transfer out of Bitcoin into the next crypto. In the United States it is easier to trade crypto to crypto than to cash out into fiat, and easier to get into crypto by earning it than to cash out of it. So crypto in my opinion if earned by for instance blogging on Steemit, is something a lot of people will put into Bitcoin, Ethereum or some other rising crypto and simply hold until the political conflict resolves itself with these crypto all being as a much higher price,
South Korea has proposed several ideas to try to cool off the speculative mania which their authorities fear are increasing systemic risk in their economy. They propose adopting some of the horrible tax complexity of the United States by putting in place capital gains. In my opinion this move will have the exact opposite effect because capital gains don't keep people from putting money in but discourage people from cashing out. So I don't understand exactly why they would choose this measure if they are concerned about the price of Bitcoin going too high as this move would in my opinion be extremely bullish for the price as it encourages long term holding and discourages spending. South Korea also considers outlawing trading on all but the regulated exchanges, and this could work to inspire security and confidence.
Although the more libertarian elements of the bitcoin scene see regulation as antithetical to the cryptocurrency’s nature, not everyone in the bitcoin business opposes such moves. Many see formal rules as part of bitcoin’s legitimization—a sign that it’s being taken seriously and therefore here to stay.
The capital gains in my opinion are a bad idea. The regulation of exchanges in my opinion are a good idea. An outright ban would be tragic mainly for South Korea because it will provide opportunity to foreign countries at the expense of South Korean citizens. Banning foreign traders is also a horrible option because this is less money to be made for native South Koreans and will only allow foreign traders to trade somewhere else.
Crypto currencies bring risk and opportunity. The systemic risk if a country has a complete saturation of investment mania without safe guards in place can be dangerous. So I understand South Korea taking steps if their goal is to protect their economy from collapse. At the same time I don't see enough volume or money at stake to be the same risk of a collapse that the housing or tech bubbles were in the past, so I don't see extreme actions or draconian laws being necessary any time soon. I think in the United States housing is currently in a bubble, and many people are in deep debt, yet there is no emergency meeting on how to deal with the housing bubble or on the debt crisis, even if these have a major impact in terms of systemic risk.
Crypto currencies are in a way virtual real estate and can form bubbles for many of the same reasons we see with housing. That being said, it does not mean that the current bubble is anywhere near peak, as the total market for crypto is still under 1 trillion. It also does not mean that it is entirely speculative mania, because just like the Dot Com bubble, or the many other bubbles, usually something good comes from it.
They all want to ban it then want to come back and join because of the opportunity they are missing out on
It makes sense for any government to want to have control over such vast amounts of digital wealth. The ones who will be informed last about it (I suspect most 3rd world countries) will be the ones whose government will have a hard time controlling its own flow of cash.
I didn' realize crypto had gotten so big in Korea. This explains why my friend there keeps asking me questions about crypto every time I post about it on Facebook
they will try and fail ask the chinese , and the more they try they make it famous and even more people will want in, they should understand that this is the future and there is no stopping it
it would be a real downward shift from the way that south korea/seoul has invested in a digital infrastructure and future to be closed minded to the idea of digital cash and the speed of economy. you can't open the doors and then say slow down it's too fast. you just have to learn to adapt, or at the very least get the implants that help you see, run and lift faster than anyone else -- physically or virtually ;)
Indeed. Initially most government will try to ban it. When they wont succeed, they would make rules to levy hefty taxes on profits arising from trading in cryptos.
Regards Nainaz
#thealliance