Daily Litecoin News Update
Cryptocurrencies wiped out billions from their market cap this week. What we saw on Wednesday was only a trailer. This horror flick is playing to a full house on Thursday morning. Top cryptocurrencies have just hit their new all-time lows in 2018. Once again, investors have the Koreans to blame.
The steep drop in prices overnight resulted from a rumor that South Korea may be banning cryptocurrency trading altogether. Deja vu!
- First, there’s a rumor of a complete ban.
- Then, crypto prices begin to crash.
- Then, the government backtracks, taking a milder stance.
- Then, crypto prices recover.
This is the second time we’re seeing this flow of events. Just three weeks ago, something similar occurred that caused prices to tank and later revert.
Here’s what South Korea’s Ministry of Justice said this time that caused the wildfire to spread.
“The South Korean Ministry of Justice is considering the closure of cryptocurrency trading to bring cryptocurrency mania and speculation under control for investor protection.”
Here’s how the country’s Ministry of Finance and Strategy later countered it.
“We do not share the same views as the Ministry of Justice on a potential cryptocurrency exchange ban.”
(Source: “South Korea’s Finance Ministry Refuses to Support Cryptocurrency Trading Ban,” CCN, January 11, 2018.)
Sweet. That’s comforting.
The last time this happened, the government offset the ban rumors by only putting in place some regulations. This was done to ensure the safety of investors.
Mind you, South Korea is one of the biggest markets for cryptocurrencies. Investor exuberance for cryptos runs so high there that the Koreans are willing to pay an extra premium to get their hands on these investments. From grandmas to minors, virtually everybody in South Korea has been investing in cryptos.
For instance, as of now, Litecoin is trading for over $300.00 at South Korean exchanges Bithumb and Coinone, while its average price on other exchanges is just under $240.00.
So it’s understandable why the government cracked down on these exchanges. However, the rumor of a complete ban is just that; a rumor. Its crypto-equivalent is FUD—shorthand for fear, uncertainty, and doubt.
This FUD factor has disrupted cryptomarkets far too many times in the past. Recall how cryptocurrency prices reacted to China’s ban on initial coin offerings (ICOs) back in September. We initially saw a massive wave of sell-offs. But within days, prices were back on track and heading straight for the moon.
With this context in mind, I’m no longer buying this FUD. The massive dip in prices may have, in fact, opened a temporary buy window for investors.
To me, this drop in LTC prices is a temporary hitch that will pass. Here’s how Litecoin founder Charlie Lee is similarly reassuring investors.
There is no reason for us to turn bearish in our Litecoin price forecast because of South Korea’s ban rumors. Ban or no ban, cryptocurrencies have a promising future, so we’re looking ahead as we maintain our $400.00 LTC price target for 2018.