Ripple News Update
This week, tax authorities (and in some cases, police officers) investigated South Korean cryptocurrency exchanges on claims of money laundering. At the same time, the Korean government considered a bill to impose strict rules on crypto trading within the country.
I think you can guess the impact on crypto prices…
Everything is in freefall. Ripple prices are particularly hard hit, falling 12.86% against the U.S. dollar, and bringing the XRP to USD rate down to $1.70.
From my preliminary analysis, investors are bracing for another Chinese-style cryptocurrency ban. This would sever all conversions from local fiat currency to crypto coins, but would leave crypto-to-crypto transactions intact.
However, there’s reason to believe that A) Korea’s ban is different from China’s, and B) XRP can survive either version, if need be.
First, let’s consider the differences.
Capital flight was China’s main concern about cryptocurrencies. The idea that citizens could simply evade currency controls by switching to Bitcoin or Ethereum was infuriating to the Chinese government’s notion of top-down control.
Korea’s motivation is entirely different—authorities are worried about money laundering. As a result, they may choose to ban anonymous trading of cryptos rather than dumping the entire market in the trash.
Ripple (XRP) Price Chart
I personally don’t mind the idea of linking personal identification to trading accounts. It has the twin effects of shaking out criminal elements while preserving the robust base of Korean crypto traders. It’s a moderate approach.
But even if Korea follows China down the road of intolerance, XRP needn’t fall apart forever. Yes, it is true that Korean traders helped establish momentum for the currency, but the same was true for Litecoin and its relationship to Chinese exchanges.
LTC prices slumped in the aftermath of China’s trading ban—but then they recovered. OKCoin and Huobi ceased to play an important role in Litecoin’s future. The gap they left was filled by other exchanges, such as GDAX and OKEx.
In the same way, I cannot imagine that Ripple prices will suffer permanent damage from a potential Korean trading ban. Other exchanges will fill the void left by Bithumb, Korbit, and Coinone.
The current price slump smells like opportunity. Investors that groaned about missing Ripple’s sharp ascent should consider their second chance before it’s gone because our Ripple price prediction still shows XRP reaching $10.00 in 2018.