Bitcoin Tests $25k Before Pulling Back; Korea play-to-earn ban is unlikely to end soon
The Korean government has yet to show any signs of wanting to change current laws, said attendees at Korea Blockchain Week; ether falls.
Good morning. Here’s what happens:
Prices: Bitcoin Tested $25K Before Falling In Weekend Trade; ether falls on Sunday
Insight: Korea play-to-earn ban remains a fixed term for now.
Prices
- Bitcoin (BTC): $24,404 −0.5%
- Ether (ETH): $1,958 −1.6%
- S&P 500 daily close: 4,280.15 +1.7%
- Gold: $1,816 per troy ounce +0.9%
- Ten-year Treasury yield daily close: 2.85% -0.04
Bitcoin, Ether and Gold prices are taken at approximately 4pm New York time. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the spot price for COMEX. Information on CoinDesk indices can be found at coindesk.com/indices.
Bitcoin Tests $25K Again; ether sinks
By James Rubin
Bitcoin bravely pushed closer to $25,000 for the third time in four days before pulling back closer to more familiar terrain.
The largest cryptocurrency by market capitalization recently traded at around $24,400, roughly flat over the past 24 hours and slightly lower than where it started the weekend, although investors remained cautiously optimistic about recent economic indicators showing that inflation is slowing and a lower likelihood for recession. Bitcoin has climbed over the past three weeks to change hands towards the upper end of a $20,000 to $24,000 range.
“BTC’s resilience above $20,000 had bulls pushing for more upside, especially after a successful retest of that area,” Joe DiPasquale, CEO of crypto fund manager BitBull Capital, wrote to CoinDesk. “However, we are yet to witness the breakout above $25,000, which could see BTC move quickly towards the $29,000-$30,000 range.”
Ether was recently down approx. 1.6% compared to the previous day and traded at approx. $1,950. The second-largest crypto by market capitalization behind bitcoin has recently gained ground at an even faster pace than bitcoin, topping $2,000 for the second day in a row on Saturday before falling. Ether’s surge has come as the long-awaited merger, which will transform the Ethereum protocol from proof-of-work to a faster, less energy-intensive model, approaches. Ethereum completed its third and final test environment network (testnet) merger, Goerli, last Wednesday.
Most other altcoins were in the red in late weekend trading with OP and QUICK off 8% and 7% respectively, although popular meme coin SHIB was up over 30% and DOGE jumped more than 10%.
Stock markets
Crypto gains have largely followed equities, which have also regained ground in recent weeks after a dismal first seven months. The technology-focused Nasdaq and the technology-heavy S&P 500 closed up 2.1% and 1.7% respectively on Friday as investors continued to cheer Wednesday’s unexpectedly favorable consumer price index (CPI) showing July prices that rises lower than last month. Markets hope the data will allow the US central bank to scale back its next interest rate hike to 50 basis points, a less aggressive approach than it has followed.
The Nasdaq and S&P have risen for four weeks in a row, their longest weekly gains since November last year. The Nasdaq has risen 20% since June to escape its longest bear market run since 2008.
Crypto news
Meanwhile, news from the crypto industry was mixed on Friday. India’s Enforcement Directorate (ED), a government agency responsible for investigating financial crimes, froze assets worth 3.7 billion rupees ($46.4 million) at crypto exchange Vauld, it said in a statement. The US Commodities Futures and Trading Commission (CFTC) accused an Ohio man of running a $12 million Bitcoin Ponzi scheme, filing a cease-and-desist order over allegations he defrauded interested investors in digital assets.
But the mood was upbeat at Canada’s biggest blockchain conference last week, amid a keynote speech by Ethereum founder Vitalik Buterin, a hackathon and panels.
DiPasquale cautiously noted that current macroeconomic uncertainty will continue to shadow bitcoin’s future pricing. “It may be too early to think that the macroeconomic problems are behind us,” he said. “The end of this month and all of September will be key for the crypto market due to a few factors, including the next FOMC as well as the expected Ethereum merger. If both BTC and ETH can hold on to their gains and consolidate until the end of September, we could see a bigger rally heading into Q4.”
Biggest winners
| resource | Ticker | Returns | The DACS sector |
|---|---|---|---|
| Shiba Inu | SHIB | +38.1% | Currency |
| Dogecoin | DOGE | +10.9% | Currency |
| Gala | GALLA | +6.3% | Entertainment |
Biggest losers
| resource | Ticker | Returns | The DACS sector |
|---|---|---|---|
| Chain link | LINK | -3.5% | Data processing |
| Polka dot | DOT | -2.7% | Smart contract platform |
| Solana | SUN | -1.8% | Smart contract platform |
Insight
Korea Play-to-Earn ban likely to remain in place
By Sam Reynolds
Walking through the halls of Korea Blockchain Week, it would be hard to miss advertisements for games that you can play to earn. Dozens of companies attended the conference to showcase new games they hope will be the next Axie Infinity.
There’s just one problem: Technically, these games are illegal in Korea.
As CoinDesk has reported before, converting game tokens to cash – a staple of GameFi – has been banned in Korea for longer than blockchain has existed. Article 32 of Korea’s Game Industry Promotion Act which prohibits the monetization of game tokens passed into law in 2004 when the arcade game Seatalk (바다이야기) swept the nation. There is also Article 28 of the law, which prohibits speculative actions, gambling and free gifts in the game.
Korean authorities have used the laws to order Apple’s App Store and the Google Pay store to remove Play to Earn games.
While some stakeholders expect a reversal of this ban under the crypto-friendly Yoon Suk-Yeol administration, this has not been signaled to the industry. In Seoul, sources at the CoinDesk gaming company familiar with regulatory matters said the regulatory guidance they have received from authorities remains status quo. There is no indication, they said, that the change is coming.
If anything were to happen, it would be incremental. Regulators in the country, still reeling from the 1997 Asian financial crisis, tend to be conservative and prefer to move slowly.
Slow change?
“Play-to-earn also comes in many different forms, and if the lifting of the ban happens, I think it will be partial,” Oleg Smagin, a senior crypto finance manager at Seoul-based Post Voyager, a GameFi service developer, told me. CoinDesk. “For example, the government may start by allowing free-to-play NFT games with play-to-earn elements, especially as major Korean game studios believe that introducing non-fungible tokens into the games is less risky compared to launching fully crypto-backed games with a tradable asset as currency.”
Smagin also believes that the government will look at the success record these play-to-earn titles have had abroad when making the decision.
When the Korean government does, it will undoubtedly consider how other regulators approach GameFi, and its $8.5 billion market cap, when deciding on next steps.
In Thailand, the Thai Securities and Exchange Commission urged investors to be cautious citing the high volatility of tokens and hacking risks. But these two risk factors are old news to anyone remotely familiar with cryptocurrency.
The real question that may be debated over the next few years is whether these GameFi NFTs and tokens are securities.
