The value of global cryptocurrencies plummeted after an influential index excluded South Korean exchanges from its data of price average calculations. It showed that every digital currency is priced at a 30 percent premium in South Korea.
“This morning we excluded some Korean exchanges in price calculations due to the extreme divergence in prices from the rest of the world and limited arbitrage opportunity,” CoinMarketCap, arguably the most prominent global index of cryptocurrency prices based in the US, wrote on Twitter on January 8 (local time). CoinMarketCap sums up real-time prices for 1,386 cryptocurrencies, including Bitcoin, from about 7,600 exchanges around the world in Coordinated Universal Time (UTC), and it has excluded three Korean exchanges – Bithumb, Coinone, and Korbit – from its averages this time.
This is because the price of digital currencies in South Korea is much higher than that in other countries owing to the frenzy of cryptocurrency investment in the country. In fact, the price on Seoul's financial exchanges for virtual currencies is currently at the 150 percent level of the international prices. As the South Korean cryptocurrency price bubble has burst, digital currency prices at the global cryptocurrency exchanges fluctuated as well. According to Bloomberg, the international price of Bitcoin plunged to US$13,900 (14.87 million won) at 12 am on the 9th in Korean time, down 15 percent from the high point a day earlier. The WSJ reported that the price of Ripple decreased 26 percent in just one day, while that of Litecoin dropped 12 percent.
Citing CoinMarketCap, the WSJ also said that US$100 billion (107 trillion won) of the market capitalization of virtual currencies disappeared over the last 24 hours. Its total market cap amounted to US$835 billion (893.45 trillion won) as of the 7th. However, the figure once decreased to US$683 billion (730.81 trillion won) and then rebounded to US$722 billion (772.54 trillion won) on the 8th.