Bitcoin prices will still be volatile in the wake of news that is perceived as good or bad about the cryptocurrency. But perhaps the scope of the volatility is beginning to wane.
A headline today (Sept. 29, 2017) at news.vice.com read:
Bitcoin and ethereum tank as South Korea bans cryptocurrency crowdfunding
The reason for the drop, according to the website, was “South Korea clamping down on initial coin offerings (ICO) Friday, banning the practice of cryptocurrency crowdfunding, often used as a source of capital for startups.”
This followed just weeks after China took a similar action, prompting a $1,900 drop from around $5,000 to around $3,100. In recent days, the value has crept back up above the $4,000 mark.
According to Coinbase.com, Bitcoin’s price dipped below $4,000 between midnight and 2 a.m. Central time in the United States. The vice.com story must have been written around that time (there was no time stamp), because as dawn broke on the east coast of the United States, prices began to rise again. In fact, as of 12:30 p.m. Central time, all of the value dropped overnight was restored, and then some. Bitcoin’s value was more than $4,200 at that hour.
Perhaps Bitcoin investors are beginning to understand that actions by national governments to try to control Bitcoin exchanges and purchases will certainly cause some anxiety in those specific countries. But Bitcoin is a world-wide cryptocurrency that cannot be regulated, according to a paper by scholars at the Columbia University School of Business. Because it is decentralized, there is no one place to go to “turn it off.”
Individual governments can make certain Bitcoin-related actions in their jurisdiction illegal, but residents of the vast majority of the 195 nations on Earth can purchase it and use it at will.
So just about a month after China’s announcement temporarily rocked Bitcoin’s value, today’s announcement by South Korea, another major world economy, caused what amounted to a hiccup on Bitcoin value charts.
Many people learned after the Chinese action that investors worldwide realize the value in Bitcoin and most did not sell even as many Chinese investors sold off frantically. So, even if the United States someday takes action to try to regulate Bitcoin, the world will probably say, “Sorry to hear that, Americans. We in the remainder of the world are going to continue to enjoy the benefits of owning Bitcoin.”
One country that said that to the Chinese today was Japan, according to CNBC:
On Friday, Japan’s Financial Services Agency (FSA) officially recognized 11 companies as registered cryptocurrency exchange operators. The registration places several requirements on the companies, such as building a strong computer system and checking the identity of users to prevent money laundering. These regulations are intended to protect investors from fraud and other abuse, while supporting financial technology innovation.
“This is the latest decision in Japan to show support for digital currency,” the story continued. “In April, it passed a law recognizing bitcoin as legal tender, with several retailers backing the law; this week it was reported that Japanese banks are considering setting up their own digital currency called the J-Coin.”
The article continued:
… now trading volume is more distributed around the globe than ever before, with trading in U.S. dollars and Japanese yen outsizing volume in Chinese yuan, according to data from CoinDesk.
“In many ways, virtual currencies might just give existing currencies and monetary policy a run for their money,” she said. “The best response by central bankers is to continue running effective monetary policy, while being open to fresh ideas and new demands, as economies evolve.”
These developments are no surprise to the Bitcoin Coaches, who have stated our faith in Bitcoin’s value for years. If you are interested in learning how to acquire some Bitcoin, visit our quick start guide.