Bitcoin price (BTC/USD) drops below $11,000 after new South Korean rules come into effect

Market sentiment turns bearish after quiet morning session

Bitcoin price (BTC/USD) drops below $11,000 after new South Korean rules come into effect

South Korea’s new regulatory measures aimed at curbing speculation in cryptocurrency trading came into effect on Tuesday.

The country’s financial watchdog a week ago set a January 30 deadline for banks to switch to a new policy that would allow only a user’s real name to be used in cryptocurrency trading. The regulator also provided further guidelines for crypto exchanges, outlining situations that could be indicative of illegal activity.

The implementation of the new rules did not appear to have a negative impact on the market, which had a relatively quiet morning session. Earlier today, a representative of Bithumb, South Korea’s leading cryptocurrency exchange, told CNBC that operations had "gone smoothly" following the introduction of its the real-name cryptocurrency identification service. “Nothing has changed in terms of coin transaction,” the representative added.

The market sentiment has turned bearish in more recent trading, though it isn’t clear whether this is due to the introduction of the new rules. The market has so far lost around $30 billion in value during the afternoon session, with Bitcoin, the largest cryptocurrency, dropping below the $11,000 level.

Some experts have opined that the new regulations would have a positive effect on the industry in the long term.

“I think it's the start of a crackdown on anonymity and the illegal use cases that some cryptocurrencies might have," Julian Hosp, co-founder and president of cryptocurrency start-up TenX, said, as quoted by CNBC. "If, afterwards, investors and companies have more legal security working in the ecosystem, it's going to have some short-term downsides, but long term, it's going to have a really, really big boost."

In today’s trading, the Bitcoin price stood at $10,366.70, as of 18:06 GMT. The original cryptocurrency has lost 7.9% of its value in the past 24 hours.

For further information on how to buy and trade Bitcoin, see our comprehensive Bitcoin guide.

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