After the announcement of South Korea’s ICO ban, the ethereum price took a sharp dip on the heels of the news. However, the markets quickly recovered to their previous levels, showing cryptocurrencies increasing resilience in the face of tightening regulations around the world.
On September 29, Korea’s Financial Services Commission (FSC) announced a ban on initial coin offerings (ICOs). There were conflicting reports about the extent of the ban, with some sources stating that the ban only applied to Korean ICOs, while others reported that the ban mirrored China’s in prohibiting contributions to foreign token sales as well.
The markets fell immediately following the announcement, declining from $144 billion to $137.5 billion in less than two hours. However, contrary to their performance following China’s ICO ban, they quickly began to recover. By 10:30 UTC, they had crossed back over the $140 billion threshold, and the total cryptocurrency market cap currently sits at $142.6 billion, representing a 24-hour decline of just 1%.
The ethereum price would likely be the cryptocurrency hit the hardest by Korea’s ICO ban. Not only does it serve as the underlying platform for most crypto tokens but Korean markets also account for a significant percentage of ether trading volume. Indeed, it appeared the ethereum price was going to plummet in the hours immediately following the announcement because it quickly dropped from $297 to just below $280. However, the ethereum price has since climbed back to a present value of 0ver $300, representing a 24-hour decline of just 2%. This places ethereum’s market cap at $27.7 billion.
Like ethereum, the bitcoin price dipped after Korea announced the prohibition on ICOs. There was no rational basis for this, other than an unsubstantiated belief that Korea will follow China’s example and ban bitcoin exchanges as well. After falling close to $4,000, the bitcoin price is now trading at over $4,300.