Bitcoin Falls Below 40 Million Won Again... Losing Momentum

First Drop Below 40 Million Won Since the 23rd of Last Month
Stepped Decline Observed...Possibility of End to Cryptocurrency Market Boom

[Image source=Yonhap News]

[Asia Economy Reporter Gong Byung-sun] The leading cryptocurrency Bitcoin has weakly fallen below 40 million KRW. Concerns are rising that there is no longer any upward momentum.

According to the domestic cryptocurrency exchange Upbit, as of 9:42 a.m. on the 8th, Bitcoin recorded 38.67 million KRW, down about 1.00% from the previous day. This is the first time it has fallen below 40 million KRW since recording 39.33 million KRW on the 23rd of last month.

Altcoins are also on a downward trend. At the same time, Ethereum recorded 2.97 million KRW, down 1.52% from the previous day. Dogecoin fell 1.55% to 381 KRW.

The cryptocurrency market appears to have been shaken after U.S. Treasury Secretary Janet Yellen indicated the possibility of an interest rate hike. After the G7 finance ministers' meeting on the 6th (local time), Secretary Yellen said in an interview with U.S. economic media Bloomberg, "Even if interest rates rise slightly, it is effectively beneficial from the perspective of American society and the Federal Reserve (Fed)." Earlier, on the 4th of last month, Secretary Yellen said at the Future Economy Summit hosted by the U.S. magazine The Atlantic, "Interest rates may need to rise somewhat to prevent the economy from overheating."

So far, the cryptocurrency market has been sensitive to interest rates. When interest rates rise, liquidity that has driven the market's upward trend also decreases. On March 4th, when Fed Chair Jerome Powell acknowledged inflationary pressures and the 10-year U.S. Treasury yield rose, Bitcoin stopped its upward trend and fell 2.60%.

The problem is that the current cryptocurrency market is falling stepwise while the downward trend is lengthening. After falling 5.49% on the 4th, it has been declining for five consecutive days. The decline is relatively small, in single digits. This contrasts with the 17.13% drop in one day on the 23rd of last month, when it recorded 39.33 million KRW. When the drop is large, investors may not be able to respond in time but the possibility of a rebound is high. However, if it falls gradually, it is difficult to rebound and investors may miss the timing to sell.

There is no positive factor for an increase. When Bitcoin recorded an all-time high of 81.99 million KRW on April 14th, expectations were high that a Bitcoin exchange-traded fund (ETF) would soon be listed on the U.S. stock market as Coinbase, the largest U.S. cryptocurrency exchange, was listed on Nasdaq.

However, the Securities and Exchange Commission (SEC), which reviews the listing of U.S. financial products, has repeatedly expressed a negative stance on Bitcoin ETFs, causing the upward momentum to disappear. On the 6th of last month, SEC Chairman Gary Gensler emphasized the need for pressure by saying at a U.S. House Financial Services Committee hearing, "Congress should take the lead in regulating the cryptocurrency market." Subsequently, the SEC's investment management division also agreed with Chairman Gensler's remarks, stating, "Bitcoin is a highly speculative asset."

Professor Lee Byung-wook of Seoul National University of Science and Technology said, "In the past, even with negative factors, there was a rebound, but this downward trend is lengthening," adding, "It is possible that the cryptocurrency market boom has ended."

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