Topic 3 - Cryptocurrency Markets Spooked by Talk of Increased Regulation(12:45~1:25)
Inaccurate reports that South Korea was banning cryptocurrency trading fueled unrest in cryptocurrency markets over the last week.
During a press conference last week, the South Korean Justice Minister, Park Sang-ki said, "there are great concerns regarding virtual currencies and [the] justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges."
The price of bitcoin and other cryptocurrencies in South Korea dropped as much as 21 percent immediately after the minister’s announcement. Only a few hours later the South Korean government clarified that it had not yet made a decision, and although a ban was being considered, other forms of regulation that did not include a ban were also being discussed.
South Korea has since announced new regulations requiring users to use their real name for cryptocurrency accounts, with fines to be imposed on those who continue to trade anonymously. This resulted in further drops in the value of major cryptocurrencies. Other countries such as China have recently introduced strict regulations surrounding cryptocurrencies, also causing major fluctuations in the markets.
South Korean officials are worried that the rising value of cryptocurrencies has fueled huge demand in the country. They fear college students and housewives are hoping to get rich quick by investing. They likened it to a game of chance.
South Korea is considered to be an overheated cryptocurrency market, and the drop in value over the last week was slightly less pronounced globally, but still significant. Bitcoin has dropped globally by roughly 15% over the last week, for example.
Bitcoin, the world's first major cryptocurrency, was launched in January, 2009. By February 2011, one bitcoin was worth roughly one USD. By the start of 2017 one bitcoin was worth about 1,000 USD.
Bitcoin began to quickly rise in value last year, peaked in mid-December at roughly 19,800 USD, then fell sharply not long after that. Since then it has proven to be volatile, but has retained much of the gains it made last year. Since the most recent drop in value, one bitcoin is worth roughly 11,000 USD.
Questions
1. What are your thoughts on South Korea's new regulations surrounding cryptocurrencies?
2. Would you agree that trading cryptocurrency is like playing "a game of chance"?
3. Do you believe that South Korea will eventually ban cryptocurrency trading?
4. Is bitcoin increasing in popularity in your country? Why do you think so?
5. Would you ever consider investing in a cryptocurrency? Why? Why not?
6. Do you think cryptocurrencies could ever completely replace traditional currencies?
7. Are you of the opinion that all 'get rich quick' schemes are scams?
8. In your opinion, what skills or knowledge must a person have if they are to succeed as an investor?