Bitcoin Price Rises After South Korea Announces Support For Cryptocurrency Transactions

UPDATE: 12:01 a.m. EST — The gains made by cryptocurrencies Tuesday were all lost by the end of the day. The price of bitcoin fell by over 6 percent, ending Tuesday at about $10,750. Ethereum lost more than 8 percent, and was trading at about $871 at midnight, while Litecoin declined by over 9 percent, trading at about $219. Bitcoin cash was the biggest loser among the popular cryptocurrencies, falling by almost 11.5 percent to $1,355 at midnight.

Original story:

The price of bitcoin and other popular cryptocurrencies made further gains Tuesday, the rally driven in part by an announcement from South Korea that said the country would support “normal transactions” of virtual currencies. Bitcoin, the most well-known cryptocurrency, has gained about 20 percent in the last seven days.

During early Tuesday trade, bitcoin fell to a low of below $11,250, but gained over $500 in the next 12 hours, touching the day’s high point of $11,760 at about 4 p.m. EST. However, at about 8:30 p.m. EST, the price had fallen below $11,000, losing almost $900 to hit a low point of almost $10,860. By 10 p.m. EST, it was trading comfortably above $11,000 again, but still showing an intraday loss of about 3.2 percent.

Since the recovery began almost two weeks ago, there has been a sharp dip every day, likely a result of profit-booking by traders. But from the low of below $6,200 on Feb. 6, bitcoin came close to doubling in value Tuesday.

The other popular cryptocurrencies followed a similar pattern, but their intraday performances were somewhat worse. Ethereum lost value through most of the day Tuesday, making a small recovery only in the evening and night. At about 10 p.m. EST, it was trading for $896, an intraday loss of about 5.4 percent.

Litecoin, which had gained very sharply following the South Korean announcement, was down by about 6.9 percent at 10 p.m. EST. Soon after the South Korean announcement, it had touched its high point of the day at just over $250, and hit a low of $217 in the evening, like the rest of the pack.

Bitcoin cash, a bitcoin fork, was the worst performer among the popular digital currencies, losing about 9.3 percent in value by 10 p.m. EST, when it was trading below $1,385. It had started Tuesday valued at over $1,525, and hit a low of $1,327 in the evening.

The comments by the governor of South Korea’s Financial Supervisory Service, Choe Heung-sik, were seen as a climb-down by the government from its recent stance on cryptocurrencies, which was one to impose new regulations on the industry.

In January, South Korea announced rules for cryptocurrency trading accounts in banks, banning anonymous accounts in a bid to weed out potential illegal activity, as well as to check concerns about a bubble in the industry. The government was also considering a ban on cryptocurrency exchanges, but that proposal was put on hold, pending consultations. The country is also keen to work with neighbors China and Japan to create regulations for the industry.

Given all the noises coming from the government, which are sometimes contradictory, South Korean banks have been somewhat unwilling to open virtual trading accounts for cryptocurrency traders, according to local reports. Choe also said Tuesday the government would “encourage” banks to work with cryptocurrency exchanges.