Young People in South Korea Among Hardest Hit by Shrinking Crypto Markets

In an economy with a widening gap between rich and poor, young people saw an opportunity in cryptocurrency.

Crypto investors who decided to dive in to the crypto market at its peak in December of last year are reeling in the wake of the significant market haircut that has taken place over the last month.  Those who’ve decided to ‘hodl’ onto their coins may have a chance of regaining their losses, but those who sold their coins at a loss have no chance of recovery.

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South Korean news source Yonhap News reported the remarks of one young man who has lost 64% of the investment that he made into NXT coins last month: “I am repeatedly asking myself whether I should sell this at a loss, but I can’t make a decision.”

Yonhap reported that Kim Jung-sik, Professor of Economics at Yonsei University, believes that the young people of South Korea have been especially vulnerable to making unfortunate investment choices.

Jung-sik explained that in an economic landscape where the gap between rich and poor is widening, some young people saw the highly volatile crypto markets as an opportunity to make fast money–and lots of it. He said that “the reason why young generations are driven into cryptocurrencies is they think cryptocurrencies are the last opportunity for turning their lives around.” (Translated quote.)

As one of the countries with one of the highest BTC trading volumes in the world, South Korea’s cultural obsession with Bitcoin and other cryptocurrencies sparked the government’s concern for the financial and mental well-being of its citizens. Fortune reported that South Korean policymakers were charged with the task of deterring the growth of “a new tribe of traders called ‘Bitcoin zombies.’”

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South Korean Prime Minister Lee Nak-yeon expressed his particular concern for young people and students with regards to crypto, calling crypto trading in his country “a serious pathological phenomenon.”

South Korean regulations that began as rumors in the very last days of 2017 are largely cited as the ‘cooling off’ of the crypto markets that has taken place over the last month.

Yonhap reported that talk of a possible decision by South Korean regulators to shut down exchanges prompted tens of thousands of South Koreans to sign an online petition against the measure. In the end, it was decided that anonymous cryptocurrency trading accounts would be banned from January 30, with more possible regulations on the horizon.

Crypto Users Worldwide Suffer Losses as Crypto Markets Cool

The crypto craze that gripped South Korea in the month of December also caused a giant influx of new users worldwide; by some reports, hundreds of thousands of new registrants signed up for crypto exchange accounts every day throughout the month.

People who bought into crypto in the month of December and held onto their coins for more than a few weeks have likely suffered losses. Bitcoin’s valuation nearly hit $20,000 in mid-December; it has since corrected sharply to roughly $11,300; practically, this means that if you would have bought a single bitcoin at peak value, you’d be out nearly $9,000.

Bitcoin does not show any immediate signs of significant growth, but some are optimistic that the possible implementation of the Lightning Network could boost BTC into recovery.

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