NICOLAS SWAYA WRITES – Bitcoin and other cryptocurrencies have become a global phenomenon over the last two years, the price of bitcoin skyrocketing 1100% in the last year alone. It has been called the greatest transfer of wealth in human history, and people are quickly taking notice. While cryptocurrency originally attracted the attention of small investors seeking to get rich quick, it is now in the international spotlight, garnering attention from governments worldwide.
The market for these currencies is unregulated and relatively small, meaning that it is extremely volatile and susceptible to market manipulation. Currently, South Korea holds the most global market when exchanging currencies. South Korea’s newfound power comes with skepticism from regulators and government within the country. The idea of an unregulated currency and market is a major threat to global powers, and talk of outlawing currency is commonplace.
Park Sang-Ki, Justice Minister of Korea, stated that he was developing a bill to ban the trading of cryptocurrency. This announcement alone caused the market to lose almost half its value over the course of a week. The announcement was met with sharp criticism from the public over social media. A petition against the movement gathered more than 120,000 signatures. These actions led Sang-Ki to recall his statement. Despite this, the market continues to stagnate as uncertainty in Asian countries remains high.
Media holds a special power when influencing the price of cryptocurrency, different from the common stock market. Websites such as coinmarketcap.com and Reddit constantly provide updates on the latest news surrounding the market, and provide discussion forums for investors. Many of these individuals choose to invest in whatever cryptocurrency is the hot topic at the moment, rather than doing any sort of research of their own. Automated bots have been found across the web, hyping worthless currencies to artificially drive up price.
This sort of manipulation is worrying for countries such as South Korea, who fear that many individuals will lose most of their wealth through bad investments. The 1997 Asian financial crisis is still too fresh for many to trust such a speculative and volatile asset. While global leaders rush to regulate markets, media continues to speculate on not if, but where the cryptocurrency market will go in the future.