"Kakao Pay plunges 17% after second trading halt lifted... Stablecoin concerns spreading"
Summary
- It was reported that Kakao Pay shares plunged by as much as 17% after the second trading halt was lifted.
- Although shares had recently soared by 148% on expectations of the introduction of stablecoins, financial regulators and the central bank emphasized related risks and maintained a cautious stance.
- Sean Oh, a trader at NH Investment & Securities, diagnosed that 'Kakao Pay shares are overheated, and a realistic revaluation will be unavoidable going forward.'
Today (27th), with the second stock trading suspension of this month lifted, Kakao Pay shares are showing a drop of over 10%.
According to Bloomberg on the 27th, Kakao Pay shares at one point during trading fell as much as 17% on the day. Previously, the Korea Exchange designated the company as an investment risk issue and suspended trading for a day. Trading resumed today. Since the launch of the new administration, Kakao Pay shares had soared as much as 148% this month through the 25th, buoyed by expectations for the introduction of KRW-based stablecoins.
However, financial regulators and the central bank are expressing caution, repeatedly highlighting the risks associated with the spread of stablecoins.
The Bank of Korea warned in its Financial Stability Report on the 25th that "the spread of stablecoins could trigger various risks such as market instability from mass withdrawals (coin run) and shocks to the foreign exchange market." The Bank for International Settlements (BIS) also pointed out, "Stablecoins cannot replace money, and their future role remains uncertain."
Sean Oh, a trader at NH Investment & Securities, assessed, "Kakao Pay shares are clearly overheated and have moved ahead of the company’s fundamentals," adding, "a realistic revaluation will be inevitable going forward."
Minseung Kang
minriver@bloomingbit.ioBlockchain journalist | Writer of Trade Now & Altcoin Now, must-read content for investors.
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