Politics And Media Work To Spread FUD And Hasten Last Weeks Crypto Crash

Most of us have learned when something grows too big, the government lurks behind it, whatever the item at hand may be. Recent announcements globally have clearly backed the idea.

With many small countries working to halt the trading of cryptos, many believe there would be little to no effect on the general market. If we take a look back at the South Korean saga, you can see how the coin market tends to sway off of the few words of a foreign entity. And that’s just it: this is an entire government saying no to something everyone wants, of course it had an effect, somehow, and in some way. To think otherwise at this point would be foolish.

Just look at the crypto market in general. After about a week into the official announcement by South Korea regarding new regulation being put into place, Bitcoin(BTC) took a nosedive from about 12,000 down to 7,000. That’s over 1/3 of it’s total value in that period.

Then came a shred of light, when just three days ago, South Korea’s Finance Minister announced that “regulations” would be put in place instead of a total ban on speculation. As of this writing, BTC has come back to 9,500. So there is something to be said about these potential issues arising from governments, considering South Korea isn’t the only one.

Forget the fact that the South Korean market for trading cryptos has substance to it, unlike many smaller countries. What needs to be watched is the manner in which other countries follow, and the effect they could potentially have on the crypto market.

India, a country known for political unrest and continuously trying to promote new developmental ideas, decided to actually change their paper currency, the Rupee, at the flip of a switch last year. An announcement was made to completely wipe out the use of the 500 and 1,000 Rupee virtually overnight. The South Asian Nation suddenly had over 23 billion notes, or 80% of the country’s cash, suddenly rendered “worthless pieces of paper.” The market responded, and it didn’t look so great. Some panic ensued, and demanded reasoning. That reasoning was to “clean the illicit activity” India has dealt with for decades, according to Prime Minister Narendra Modi. Now, a new challenge is faced.

In the wake of their asian neighbors doing essentially what they did, India has decided it is time to follow suit. The domino effect has begun.

India has outright claimed that it considers the use of cryptocurrencies illegal(Reuters) and will take all measures to eliminate use of these crypto assets in financing illegitimate activities or as part of the payment system, as stated by Finance Minister Arun Jaitley. So far, the expectancy of the move is a “panic selling,” which is reasonable considering the similar situation that took place with their papercurrency swap.

The reaction is sure to take place in the global markets in some manner. Again, it happened with South Korea, and its starting all over. One the panic sell off occurs, and a rebound takes place, there will surely be a void to yet again be filled, and at some point, things may not balance out the way global speculators hoped.