Digital currency bitcoin seems to be back on positive area on Thursday, as it recovers losses from a sharp decline in the previous day, after a major two-day sell-off on cryptocurrencies.
The world’s largest virtual currency was trading 17.4 percent higher to $11,492. Ethereum, the second major internet cash system, was up 24 percent from prior lows to $1,040.90.
Bitcoin fell below the $10,000 mark on Wednesday, while ethereum marked a three-week low after dropping below $800.
Bitcoin’s shortcomings at that time have resulted to the currency to lose more than 50 percent from its December high. The loss took over $30 billion in market value. The last time it went down below $10,000 was back in November 30.
Charles Hayter, chief executive of a cryptocurrency comparison site, said that trade volumes were very noisy on Wednesday, as the bulls and bears contend and some kind of calm occurred on the markets after what has been a major correction.
Increased Regulatory Scrutiny in the Cryptocurrency Market
Cryptocurrencies suffered significant losses on Wednesday, as the sell-off in global cryptocurrency markets seemed to show no signs of stopping just yet.
The sell-off triggered when prices of major digital assets sharply declined following South Korean policymakers’ statement of thinking about shutting down domestic crypto exchanges.
The country once again suggested on Thursday that they are mulling over closing all exchanges. The country is one of the major markets for bitcoin and ethereum.
Trading of digital currencies in South Korea is highly speculative. They are usually traded at a premium, pricing them much higher in the country than anywhere else in the world.
Regulators have been alarmed by the cryptocurrencies’ extremely volatile nature as well as their potential to be used for illegal activities.
If the plan is carried out, the policymakers in South Korea will be repeating China’s move in 2017. Chinese regulators shut down virtual currency trading exchanges last year.
China meanwhile, was believed to be further stepping up its crackdown of the cryptocurrency market. The country was reportedly planning to end centralized trading of virtual currencies, along with individuals and companies offering related services.
Ever since the country ordered exchanges to close, activities still continued through other channels in the country despite the clampdown.
Hayter said that regulation of digital assets will be good in the long run. However, he cautioned that unnecessary hoops and administration could restrain the industry’s capability.