The value of bitcoin fell by double percentage digits on Thursday after the South Korean government said that it plans to impose fresh measures to regulate speculation in cryptocurrency trading.
Mid-morning in London, bitcoin was trading around $14,000 (£10,400) apiece according to several trading platforms, having surpassed $16,400 earlier in the week.
“The government had warned several times that virtual coins cannot play a role as actual currency and could result in high losses due to excessive volatility,” the South Korean government said in a statement, according to Reuters.
The government announced that it would ban opening anonymous cryptocurrency accounts and would introduce legislation giving regulators the power to close virtual coin exchanges if necessary. The government said that this was a measure recommended by the justice ministry, according to Reuters.
Bitcoin is notoriously volatile and has endured a turbulent year, rallying from below $1,000 dollars at the start of January 2017 to over $19,000 earlier this month.
Scores of financial experts have advising potential retail investors against getting involved in bitcoin, but others are speculating that the currency will keep rising over the coming months, pulling other crypocurrencies – like ethereum and litecoin – with it.
Just before Christmas, three bitcoin exchanges were forced to halt trading in the asset after it dropped by more than 40 per cent in value. One, Coinbase, said at the time that buying and selling had been disabled as a result of technical problems caused by high traffic.
Unlike global currencies, bitcoin is not regulated by a central bank meaning that mass sell-offs cannot be easily halted or controlled.
