[Bitcoin Now] Recovery to 68 Million Won Level Amid Zero Interest Rate Maintenance

Acceleration of Institutional Investor Participation Including Morgan Stanley

On the 15th, Bitcoin information was displayed on the electronic billboard at Bithumb Gangnam Center. [Image source=Yonhap News]

[Asia Economy Reporter Gong Byung-sun] The representative cryptocurrency Bitcoin has recovered to the 68 million KRW range. This appears to be a positive factor following the U.S. Federal Reserve's (Fed) announcement to maintain zero interest rates.

According to the domestic cryptocurrency exchange Upbit, as of 2 p.m. on the 18th, Bitcoin recorded 68.04 million KRW, down about 0.66% compared to the previous day. After rising from the 62 million KRW range to the 64 million KRW range the day before, it is continuing its recovery trend.

The news that the Fed will maintain zero interest rates seems to have had a positive impact. On the 17th (local time), the Federal Open Market Committee (FOMC) announced that it would keep the benchmark interest rate, currently at 0-0.25%, unchanged and maintain the pace of asset purchases. It also added that there would be no rate hikes until 2023.

The maintenance of zero interest rates has raised expectations that the liquidity expansion trend will continue, stimulating the cryptocurrency market. In March last year, after the COVID-19 pandemic, liquidity expansion policies were implemented worldwide, attracting investment funds and causing Bitcoin prices to surge. When Fed Chair Jerome Powell expressed his intention to maintain an expansionary monetary policy during the Senate Finance Committee hearing on the 23rd of last month, Bitcoin prices, which had been declining, rebounded by 2.53%.

Meanwhile, on the 16th (local time), U.S. economic media CNBC reported that Morgan Stanley, the largest investment bank in the U.S., plans to operate a Bitcoin fund. This was analyzed as a milestone for Bitcoin to be recognized as mainstream. However, Morgan Stanley decided to allow investments only to clients with a minimum asset size of 2 million USD due to Bitcoin's still high volatility. Even qualified clients are restricted to investing only up to 2.5% of their net assets.

Morgan Stanley has shown interest in Bitcoin in the past. According to U.S. economic media Bloomberg on the 8th, Morgan Stanley indirectly entered the cryptocurrency market by investing capital in New York Digital Investment Group, a cryptocurrency investment specialist company. In January, it also acquired a 10% stake in MicroStrategy, a private company holding the largest amount of Bitcoin.

Global credit card company Visa is also aggressively entering the cryptocurrency market. On the 17th, Visa CEO Al Kelly stated in an interview with U.S. economic media Fortune that the company plans to expand its cryptocurrency business. The plan includes establishing a platform to purchase Bitcoin or convert cryptocurrencies into fiat currency. Earlier, on the 3rd of last month, Visa announced that it was preparing an application programming interface (API) to support banks in handling cryptocurrencies.

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