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Bitcoin Just Took A Big Plunge And It's All Because Of South Korea

Bitcoin Just Took A Big Plunge And It's All Because Of South Korea

It might seem a bit of a petty plunge considering how much Bitcoin used to be worth, but Bitcoin just took a huge four-figure plunge in value today, and it's all down to South Korea.

Bitcoin just plunged below $14,000 (£10,415) - losing more than $1,000 (£743) in value - after the South Korean government warned it planned to crack down in 'irrationally overheated' trading of the digital currency.

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South Korea, one of the currency's biggest markets, said it was planning to bar banks from offering anonymous Bitcoin accounts, requiring transactions to name participants.

The government also hinted at new laws to allow officials to close some exchanges of the currency if they felt there was a need to do so. Clearly, the move has spooked investors in the currency.

"Cryptocurrency speculation has been irrationally overheated in Korea," the South Korean government said in a statement reported by Bloomberg News. "The government can't leave the abnormal situation of speculation any longer."

South Korea is a vital market for trading Bitcoin, with industry estimates stating that 21 percent of all global Bitcoin volume are done in Korean won.

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Yet South Korea is taking a tough stance on digital currencies, banning initial coin offerings earlier this year and reportedly barring local finance firms from handling bitcoin futures.

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One of the country's high-profile Bitcoin exchanges, Youbit, went bankrupt just two weeks ago after it was attacked by hackers for the second time.

The Seoul-based Youbit shut down after losing 17 percent of its assets in a cyber-attack which was later blamed on North Korean hackers.

Not everyone was pessimistic though:

Bitcoin has become one of finance's biggest stories of late, as the cryptocurrency has surged in value this year by more than 900 percent, reaching a peak value of almost $20,000 (£14,877) earlier this month.

One expert has even come out on record as saying that the value of Bitcoin could top $100,000 (£74,545) in 2018.

Dave Chapman, managing director of Octagon Strategy, a company which trades in cryptocurrency, said he 'wouldn't be surprised to see a six-figure headline' for Bitcoin in 2018.

However, leading finance figures and economists have warned that the currency is a haven for criminals such as fraudsters and drug dealers.

Experts have also warned that a market crash can't be far as Bitcoin's rapid increase in value could quickly unwind, hitting investors hard with severe losses.

All of these mini-crashes in recent weeks are fine, but how far is the Bitcoin bubble from bursting?

Featured Image Credit: PA

Topics: Bitcoin, World News, South Korea, News, Finance, Cryptocurrency

Chris Ogden

Chris Ogden is a journalist at LADbible. He graduated from the University of East Anglia with degrees in English Literature and Creative Writing before completing his NCTJ Diploma in Multimedia Journalism. Chris has previously written for the independent culture magazine The Skinny, among other publications.