Bitcoin is regaining some ground following a two-day collapse which shed off tens of billions off of the market value of the cryptocurrency.
Today, according to Coinmarketcap, the world’s number one cryptocurrency was up by 12.94 percent at $11,652.80, after plunging to below $10,000 yesterday, which is around half the value of bitcoin’s all-time high.
Other major cryptocurrencies were also able to make it into the green, including ethereum, which is back to more than $1,000, and Ripple, which was up to having a value of $1.51 from yesterday’s low of under $1.
Digital currencies were struck by concerns of a major regulatory crackdown that was imposed in South Korea.
According to Reuters, today, policymakers in South Korea have said that they are considering a shut down of domestic virtual currency exchanges.
As a response to questions in parliament, chief of the Financial Services Commission of South Korea said: “[The government] is considering both shutting down all local virtual currency exchanges or just the ones who have been violating the law.”
The announcement arrives as regulators look for ways to prevent cryptocurrencies from being used for money laundering and other crimes.
The head of equity strategy at Interactive Investor, Lee Wild, stated: “a clampdown by regulators risks bringing the crypto party to a bloody end, but there’s no guarantee the South Korean and Chinese governments will follow through on threats to ban the practice. Expect further extreme volatility as crypto traders are kept guessing.”
After the drop yesterday, analysts at CityIndex said that it is now clear that the meteoric rise of bitcoin late last year was “speculative hot air.” However, prices could now start to stabilise.
“Contrary to what the disbelievers say, the recent heavy falls do not necessarily mean the end for bitcoin. $10,000 continues to offer support to the currency for the time being.
“However, it is becoming more obvious that the recent burst higher at the end of last year was speculative hot air, the danger is that those who assumed that there was a quick buck to be made will now be looking to sell out, which could add more selling pressure. This could then finally allow the price to stabilise to then grow at a more contained pace.”