Bitcoin’s prices plunge shortly after Coinbase’s listing on a market fear about a potential U.S. Treasury crackdown.
The mania that drove crypto assets to records amid Coinbase’s long-awaited listing turned on itself on the weekend. Regarding the cause of the price crash, some pointed to power outages in China, affecting miners on the Bitcoin network.
According to Bloomberg, there are unsubstantiated reports that the US Treasury planned a crackdown on money laundering carried out through Bitcoin and cryptocurrencies.
Prices of Bitcoin (BTC) dropped over 18% from the all-time high at $64,804 to a recent low at $52,810. At the time of writing (19 April, 10:28AM, HKT), Bitcoin is trading at $56,749, down 3.8% in the previous 24 hours.
Other cryptocurrencies have also plummeted. Ether (ETH) also dropped 11% from the all-time high at $2,544, and it is now trading at $2,237, down 1.4%.
Amid Bitcoin’s price fall, South Korea’s “kimchi premium” is back.
The kimchi premium represents the difference between Bitcoin’s price on South Korean crypto exchanges and the going rate on other exchanges outside the country.
The reasons for the discrepancy ultimately stem from trading limitations unique to the country’s exchanges and the existence of domestic capital controls.
Short Seller Targets Hong Kong Digital Asset Firm Diginex
Bitcoin is trading for $65,882 in South Korea on South Korean exchanges such as Bithumb and Korbit. That is an 18.6% difference than global exchanges, such as Binance and Coinbase.
Kimchi Premium has become a popular Bitcoin market indicator. It signals a retail frenzy in South Korea historically observed when Bitcoin’s prices are peaking.
In February 2021, the difference stood at around -6.5%. And today’s kimchi premium of 18.6% is still lower than that in May 2017 (63%) and January 2018 (47%).
On the other hand, short seller Iceberg Research issues a report targeting Hong Kong digital asset firm Diginex. In October 2020, Diginex listed on Nasdaq through a SPAC acquisition with a Singapore-based SPAC, 8i Holdings.
Iceberg Research said Diginex is burning cash at an unsustainable rate on its institutional-focused crypto exchange EQUOS.io. According to the short seller, Diginex’s businesses generated only $23,100 for the first half of 2021 (end September). And this figure was down from $180,000 a year before.
“All that underlies its inexplicable market cap of $345m are a powerpoint deck and a struggling marketplace,” Iceberg Research wrote.
Swiss bank UBS is reportedly exploring to offer cryptocurrency investments to wealthy clients. This move comes after more investment banks, including Goldman Sachs and Morgan