Ripple News Update
It’s amazing how much damage one man can inflict with arrogance and misinformation. Take, for instance, South Korea’s Minister of Justice, the man who single-handedly drove billions out of the crypto market last week.
In a press scrum with reporters, the minister blurted out that Korea would seek to ban cryptocurrency trading. Prices began to fall almost instantly.
XRP, in particular, lost tens of billions in market cap.
One could argue that the minister was doing his job, but that’s only true if his information was correct. It wasn’t.
The President’s office and the Ministry of Finance walked back (more like ran back) the comments a few hours later, saying that “no decision” had been reached.
But the damage was done.
XRP prices retraced to below $2.00, rising momentarily on a partnership with Moneygram International Inc (NASDAQ: MGI)—a remittance provider looking to test out blockchain for international transfer—then falling again.
At the time of writing, Ripple prices were down 2.86% against the U.S. dollar. This put the XRP to USD exchange rate to $1.81.
Ripple (XRP) Price Chart
So what’s with our headline, then? How can Korean regulations spark a bullish rally in crypto prices?
Let me explain…
After the Justice Minister’s remarks went public, there was backlash from, well, the public.
A government web site registered more than 4,000 petitions, including one to have the minister fired. Another one asked for softer regulations. It had 100,000 signatures.
Put yourself in the shoes of a South Korean politician now. Rage is sweeping the country because of something you haven’t even done yet. What would you do? The obvious answer is to not do that thing at all.
And that’s exactly what seems to be happening.
In an announcement on Sunday, Korean authorities announced that rather than banning cryptos, they are asking investors to link their identities to their accounts. The move would abolish anonymous trading, but at least a market would exist.
Also, here’s a telling quote from the Office for Government Policy Coordination:
“The proposed shutdown of exchanges that the justice minister recently mentioned is one of the measures suggested by the justice ministry to curb speculation. A government-wide decision will be made in the future after sufficient consultation and coordination of opinions.”
(Source: “South Korean Cryptocurrency Investors Face Fines for Anonymous Accounts,” CoinDesk, January 15, 2018.)
If a potential ban hurt XRP prices, logic dictates that yesterday’s news should help Ripple. It may take two to three days for investors to shake off the pessimism, but barring any more shocks, the XRP price should recover nicely.
As such, we maintain our $10.00 Ripple price prediction for 2018.