Litecoin News Update
The “chikun” is getting slaughtered again, and this time, it may be the Koreans feasting on it. Cryptocurrency traders in South Korea may finally have a deadline to get their act together before the government comes hunting down for the speculators.
According to some reports, January 20 may be the last day for Korean traders running incognito accounts before they are sent packing. It doesn’t take one to be a high-functioning genius to guess the obvious. These traders have preempted the inevitable outcome of the soon-to-be-imposed crypto-regulations. (Source: “South Korea Sets Date for Anonymous Crypto Trading Ban: Report,” CoinDesk, January 2, 2018.)
The fear of the crackdown has thrown a scare into the crypto-market, where the antsy traders are now unwinding their positions to avoid losing their money.
I’m looking at Litecoin’s trading volume for the past 24 hours and a good quarter of it has flowed in from the South Korean exchanges.
Two of South Korea’s largest exchanges, OKEx and Bithumb, have jointly contributed to about 25% of the total trades in Litecoin in the past one day.
Volumes are good barometers for gauging demand and supply. High volumes preceding rising prices translate into high demand. You can easily guess that there are far more buyers out there than sellers.
On the contrary, high volumes coupled with dropping prices are an indication of weak demand. That’s exactly what Litecoin investors are witnessing right now. Sellers are outnumbering buyers and the majority of them seem to be based in South Korea.
In case you haven’t been following, the South Korean government is planning to put a curb on speculative cryptocurrency trading. Under the proposed regulations, the government will be banning all fake, nameless, or duplicative accounts involved in cryptocurrency trading to ensure the safety of investors.
Likely by the end of this month, all cryptocurrency exchanges would be required to verify account holders’ identities by ensuring that each trading account is linked with an identifiable bank account. Unidentified accounts will be shut down.
For reference, South Korea is one of the three biggest cryptocurrency markets in the world—the other two being the U.S. and Japan.
This is one market where virtually everyone, from grandmas to housewives to young students, is investing in cryptocurrencies. But just as speculators began to dominate this space, the government felt forced to take the necessary actions.
The government fears that speculative trading poses a systemic risk to its markets, and rightly so. The regulations may help ensure that the speculators are not manipulating prices with a pump-and-dump game plan, putting the average investors at risk of losing their life savings.
The Litecoin founder theorizes (and I, alongwith many others, concede) that the South Korean regulations are actually good news for Litecoin. The stringent regulations will help curtail volatility in LTC prices.
Litecoin prices must attain stability for this digital currency to achieve its ultimate purpose—that is, to become a more ubiquitous medium of exchange than Bitcoin.
The mere fact that it is cheaper and faster than Bitcoin may not earn it mass adoption unless prices become more predictable.
We believe that the upheaval in prices is momentary. When the dust settles around the feared Korean regulations, Litecoin prices would be back on the right track.
Our bullishness on Litecoin remains unwavered as we maintain our $400.00 Litecoin price forecast for 2018.