It is believed that Choe Heung-sik, the governor of South Koreas Financial Supervisory Service, declared the government of Moon Jae-in will support trading through cryptocurrencies if traded in “normal transactions”.
The news that the clampdown on Bitcoin could be eased may explain the steady growth of virtual currencies.
According to the Bitstamp exchange, Bitcoin hit a three-week high of $11,722.58 on Tuesday.
The rising values marked a rise of almost 100 per cent from the dismal low of $5,920 at the start of this month.
Dennis de Jong, the managing director at an online brokerage named UFX declared that the reports could have given traders the confidence to invest in Bitcoin once more.
He remarked: “While the threat of heavy regulation, or even a total ban on exchange trading, has hovered over bitcoin in recent weeks, reports this morning that the South Korean government are softening their stance have given traders confidence to buy.”
Investment service company Canaccord Genuity commented on the stark increase.
It said: “Bitcoin’s price history suggests that months of consolidation are followed by weeks of rapid advancement.
“The safest way to benefit from potential bitcoin price appreciation is to buy and hold for the long term; trying to time it might be too difficult.”
In the last seven days Bitcoin’s value has risen by 20.49 per cent that has taken the current value of the cryptocurrency to $11,135.
Bitcoin Cash, Ethereum and Litecoin have also all seen value increases in the last seven days.
Cash rose by $98.70 in the last week and is currently worth $1,391.43.
Meanwhile, Ethereum rose by 0.3 per cent in the last week and is sitting at a total of $896.13.
Litecoin has added $25.39 in the last week and is currently worth $224.60.
South Korea had previously disclosed that it had considered shutting down local cryptocurrency exchanges entirely.
This sent virtual markets into free fall as investors lost confidence.
It is worth noting that cryptocurrency values are incredibly volatile and have carried their unpredictable trend into 2018.