[Bitcoin Now] Still Quiet... "No Inflow of US Stimulus Funds"

After Peaking at Around 70 Million Won, Declining... Hovering Around 63 Million Won
"Most US Stimulus Funds Used for Actual Consumption... Not Flowing into the Coin Market"

[Image source=Yonhap News]

[Asia Economy Reporter Gong Byung-sun] The leading cryptocurrency Bitcoin remains stuck in the mid-60 million KRW range. Contrary to expectations, analysis suggests that the stagnation is due to the U.S. government's stimulus funds not flowing into the cryptocurrency market.

According to the domestic cryptocurrency exchange Upbit, at 11:25 AM on the 26th, Bitcoin recorded 63.81 million KRW, up about 0.76% from the previous day. Although it rose to the 70 million KRW range in mid-month, it has been on a gradual downward trend since falling to the mid-60 million KRW range on the 22nd.

It is interpreted that the stimulus funds amounting to $1.9 trillion (approximately 2,155 trillion KRW) provided by the U.S. government did not flow into the cryptocurrency market. On the 24th (local time), U.S. economic media Bloomberg analyzed that the funds supplied by the stimulus are flowing into the real economy rather than the cryptocurrency market. Bloomberg's interpretation is that with growing expectations for economic recovery due to COVID-19 vaccinations, the funds led to actual consumption rather than investment.

Recently, the cryptocurrency market has not responded to positive news as before. On the 24th, major U.S. financial firm Fidelity submitted preliminary registration documents to the U.S. Securities and Exchange Commission (SEC) to issue a Bitcoin exchange-traded fund (ETF). Although this led to interpretations that the Bitcoin ETF launch was imminent, Bitcoin remained stagnant. Tesla CEO Elon Musk also announced via Twitter that a Bitcoin payment system had been established, but there was no significant rebound. This contrasts with the 17.05% increase in one day when Tesla announced on the 8th of last month that it would purchase $1.5 billion worth of Bitcoin.

There are even predictions that the Bitcoin downtrend has begun. According to Bloomberg on the 24th, Julius de Kempenaer, an analyst at StockCharts.com, analyzed, "Recently, the lows are getting lower while the gains are limited, indicating that the downtrend has started." Vijay Ayyar, head of Asia-Pacific markets at overseas cryptocurrency exchange Luno, explained, "The Bitcoin options are approaching expiration, intensifying the downtrend." According to cryptocurrency specialized foreign media Cointelegraph, Bitcoin options worth $6.1 billion will expire on the 26th.

Meanwhile, the so-called "Kimchi Premium," where Korean cryptocurrencies are more expensive than overseas, is also appearing. According to overseas cryptocurrency exchange Binance, Bitcoin was recorded at about 59.17 million KRW at the same time, approximately 5 million KRW lower than in Korea. When the record high was set on the 13th, the gap was only 1 million KRW. Generally, the Kimchi Premium is interpreted as meaning that the domestic cryptocurrency market is more overheated and inflated. During the Bitcoin craze in 2017-2018, the Kimchi Premium once reached up to 60%.

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