South Korean government: ICO market frenzy, speculation has driven the price growth of Bitcoin and Ethereum

The recent growth in the prices of cryptocurrencies such as Bitcoin and Ethereum is due to speculation rather than investment, according to South Korean government officials.

South Korean government agencies and financial regulators discussed the growth of cryptocurrencies at a meeting on Sunday. The local bitcoin industry is currently unregulated, but the South Korean government has been planning to introduce regulations in this field since late last year.

According to local media reports, officials from South Korean financial institutions pointed out that market speculation has driven the rise in the value of cryptocurrencies, regardless of investor interest. In addition, they also pointed out that the supply of tokens through ICOs has proved to be a very successful crowdfunding model driven by cryptocurrencies.

An unnamed official said:

The recent rise in cryptocurrency prices is a manifestation of speculation. This is clearly speculation. Especially the differences in the valuation of new coins issued by ICOs, so it is easy to generate unreasonable returns.

For example, the Ethereum-based prediction market Gnosis is a typical example of a successful ICO, raising $12 million in ten minutes and raising an estimated $300 million by April.

Currently, South Korea has become the world's largest Bitcoin trading market, with an average daily Bitcoin trading volume exceeding 10% of the global market share. The country's demand for Bitcoin is increasing, with a premium of 10%, which is $250 higher than the Bitcoin price in the US dollar market.