Virtual Currency Shaking the Real Economy

Bitcoin Growing Between Earned Income and Asset Income
Bitcoin Plummets 17% Intraday
Yellen "Highly Speculative Asset" Harshly Criticizes
Experts "Earned Income Value Becomes Meaningless"

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min, Reporter Kim Eun-byeol] The virtual currency (cryptocurrency) Bitcoin is shaking up the global financial market. Bitcoin prices have soared to unprecedented heights fueled by inflation concerns and institutional investors' participation, while showing extreme volatility due to warning remarks from key policymakers. Experts diagnose the rapid rise of Bitcoin as a phenomenon that reveals the gap between the real economy and the financial market.

On the 22nd (local time) at around 9:10 a.m. in the U.S. market, Bitcoin prices suddenly plunged by 17% during the session, hitting the $48,000 range, before recovering to the $53,000 level. The day before, Bitcoin had reached the $58,000 range, coming close to entering the $60,000 mark, but again could not avoid extreme volatility.

U.S. media reported that on the 20th, Elon Musk, CEO of Tesla, influenced the market by stating that "Bitcoin is expensive." Tesla’s stock price, which had purchased a large amount of Bitcoin, also plunged by 8.5%.

On the same day, Bitcoin was also heavily shaken by remarks from U.S. Treasury Secretary Janet Yellen. At an event hosted by The New York Times, Secretary Yellen said, "(Bitcoin) is a highly speculative asset and investors should know that it can be extremely volatile. I am concerned that investors could suffer significant losses."

Secretary Yellen further pointed out that "Bitcoin transactions are very inefficient and consume enormous amounts of energy," and suggested that the Bitcoin mining process could impact climate change. Her remarks were interpreted as a warning against the recent growing interest in Bitcoin not only from individuals but also financial firms, even implying the possibility of regulatory measures.

On the same day, Secretary Yellen also mentioned that "it would be reasonable for central banks to directly issue digital currencies" as an alternative to Bitcoin.

Experts analyzed that recent asset inequality and dissatisfaction with earned income have led to the Bitcoin craze. Professor Ji In-yeop of Dongguk University’s Department of Economics interpreted this as "a reflection of the modern era where earned income has lost its meaning and the gap between the real economy and the financial market is widening."

However, opinions on the investment value of virtual assets varied among experts. Some view that Bitcoin and others were overvalued as currencies, expecting them to grow as actual means of payment or storage, while others interpret virtual assets as playing a role in asset portfolios as a kind of ‘digital gold’.

This content was produced with the assistance of AI translation services.