With the bitcoin price moving towards $15,000 on multiple exchanges, one thing was confirmed: the cryptocurrency markets are impacted by government action, but only in the short-term. In the longer-term, the effectiveness of government intervention is questionable at best.
Two major international headlines initially rocked bitcoin prices. First, South Korea threatened to ban bitcoin after one of their popular blockchain exchanges went bankrupt. Second, reports are circulating that Australian banks are freezing user accounts suspected of buying the bitcoin cryptocurrency.
No doubt these incidents are troubling. South Korea, on a per-capita basis, is one of the most heavily integrated societies into the blockchain. A recent survey revealed that 30% of Korean workers have invested in the cryptocurrency markets. Within this allocation, 80% are profitable on their positions. Most significantly, the average Korean investor owns nearly $5,300 in cryptocurrency assets.
In the southern hemisphere, we have Australia. Although most Australian investors are not deeply involved in the cryptocurrency craze relative to other nations, sentiment is strong…or, at least it was. Back in August of last year, Rupert Hackett, founder and CEO of Bitcoin.com.au, wrote a piece expressing his optimism for the blockchain. The rising bitcoin price certainly made a believer out of many.
But with their domestic banks engaging in a witch-hunt against their members, how long will it be before Australia’s blockchain exchanges collapse from fear or panic? Keep in mind that this is not the first time the government or other institutions infringed on Australians’ civil liberties. Not too long ago, the country enacted outrageous gun control laws in a bid to stop terrorism or other contrived reasons.
However, those who are fearful of a worldwide ban on cryptocurrency exchanges need not worry. The bitcoin price has absorbed these negative news items but continues to keep moving forward. Admittedly, multiple lows have kept bitcoin adherents on edge. Nevertheless, the ability for the cryptocurrency to bounce back from technical disaster confirms that the broader blockchain story is bigger than any one chapter or two.
We have to keep in mind that the cryptocurrency revolution is a truly global one. When governments take coercive action against their citizens, it only ends up hurting their own economy. This is because such actions put their citizens at a distinct disadvantage to the rest of the world, which is steadily embracing the blockchain. When the inevitable digital paradigm shift occurs, a coercive nation would find itself decades behind the game.
The robust bitcoin price also indicates that the whales are very much moving favorably towards the blockchain. Japan still accounts for roughly 40% of all bitcoin trading. In the U.S., people are excitedly talking about cryptocurrency markets when just one year ago, it was perceived to be a nerd convention. Although the South Korea and Australia incidents are negatives, the positives far outweigh the pessimism.