Increased Demand and Supply Shortage... Bitcoin Arrives Just in Time

Morgan Stanley, a Mega IB, Also Plans to Launch Bitcoin Fund
Expectations Rise for Bitcoin ETF Approval
Global Semiconductor Shortage Reduces Mining Output... Demand Up, Supply Down Creates Positive Outlook

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[Asia Economy Reporter Minwoo Lee] While demand for Bitcoin is increasing due to anticipation of the imminent launch of investment products such as exchange-traded funds (ETFs), Bitcoin mining is slowing down globally due to the semiconductor supply shortage. Analysts say this is a major positive factor for Bitcoin as demand rises and supply falls short.

On the 21st, SK Securities analyzed the recent rise in Bitcoin prices, the leading cryptocurrency, in this way. According to the domestic cryptocurrency exchange Upbit, Bitcoin prices reached 70.2 million won on the 18th. After hitting an all-time high of 71.45 million won on the 14th, prices dropped to 60 million won but surpassed 70 million won again within four days. The news that Morgan Stanley, a mega investment bank (IB) with assets under management of $4 trillion (about 4,520 trillion won), is the first on Wall Street to invest in a Bitcoin fund acted as a positive catalyst.

Earlier, the US economic media CNBC reported through anonymous sources that "Morgan Stanley is the first major bank to promote Bitcoin fund investments to its clients" and "it will launch three funds that can own Bitcoin." It is reported that they will invest at least $25,000 in Galaxy Digital’s 'Galaxy Bitcoin Fund' and 'Galaxy Institutional Bitcoin Fund,' founded by Mike Novogratz, and $5 million in the 'FS NYDIG Select Fund,' created jointly by asset management firm FS Investment and Bitcoin-related company NYDIG. SK Securities researcher Daehun Han analyzed, "It is positive news just that one of the world’s leading financial companies has prepared investment options for Bitcoin for its clients."

Expectations for the launch of Bitcoin ETFs have also increased. The US Securities and Exchange Commission (SEC) is currently reviewing the ETF 'VanEck Bitcoin Trust' applied for by US asset management company VanEck for 45 days. The outcome is expected to be revealed by the end of next month. Researcher Han explained, "Demand for ETFs and funds centered on financial institutions is increasing like this," adding, "The US disaster relief payments (about $1,400 per person), expected to be distributed starting this month, are also likely to flow into Bitcoin." In fact, when the $600 COVID-19 relief payment was distributed in December last year, Bitcoin prices surged sharply.

The supply shortage is also a positive factor. The global semiconductor shortage has put Bitcoin mining on alert. Mining Bitcoin requires massive electricity and semiconductor chips such as high-performance graphics cards. As the recent semiconductor shortage hit the world, Taiwan’s TSMC, the world’s number one foundry company, decided to reduce production of mining semiconductors first. Researcher Han explained, "Bitcoin prices are determined by limited supply (21 million units) and demand," adding, "Supply will inevitably remain insufficient for the time being, and demand will inevitably increase due to market entry by financial institutions following tech companies and the inflow of US disaster relief payments."

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