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We’ve been talking (and joking) a lot lately about whether or not cryptocurrency is a bubble, what with prices surging for even joke currency Dogecoin and companies reaping higher stock prices whether they’re actually involved in blockchain technology or not, from an ice tea company that just added the word “blockchain” to its name to companies that really are involved in currencies like Ripple’s XRP (Seagate) and “KodakCoin” (Kodak). This recent news definitely won’t quell bubble murmurings any time soon.

Cryptocurrency markets took a big hit late Wednesday night — Bitcoin down 11% and Ether down 9%, for example — due to two factors combining in what we technical types like to call a “kerfuffle monsoon” (nobody calls it this). First, the office of one of the top 15 global digital-currency exchanges (Coinone) was raided by South Korean tax officials, amid rumors they were also looking into the other top 15 exchange located in South Korea (Bithumb). Then South Korea’s justice minister announced on Thursday (late Wednesday in the U.S.) that they are preparing a bill to ban cryptocurrency trading.

It may seem like the kind of thing that would only cause a temporary dip, like the crackdown in China, but don’t assume so too quickly. As of last month, South Korea was the world’s third largest Bitcoin market and the largest market for Ether, owning 33% of all Ether worldwide. Last month, 2% of all South Korean citizens owned at least some cryptocurrency, buying with such frequency that Bitcoin often sells at a 40% higher price there than on U.S. exchanges. A disruption of trading in South Korea can have a big effect on the markets, as demonstrated last night.

It may not only be China and South Korea looking into crytocurrency exchanges. JPMorgan chief executive Jamie Dimon has said, regarding bitcoin, “governments are going to crush it one day. Governments like to know where the money is, who has it and what you’re doing with it, in case you haven’t noticed.”

(Via Reuters, Business Insider, and Technology Review)

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