Stagnant Bitcoin... Trapped in the 40 Million Won Range Box

US Hedge Fund Soros Fund's Bitcoin Trading Approval Shows Minimal Effect... Stagnant Market Without Sharp Rebound
Negative Perceptions from UK Binance Regulation and Other Governments Hinder Progress... No Institutional Investor Comeback Limits Growth

[Asia Economy Reporter Gong Byung-sun] Bitcoin, the representative cryptocurrency that caused a frenzy in the first half of this year, has been trapped in a box range around 40 million won since the beginning of the second half. Despite positive factors such as a famous U.S. hedge fund starting Bitcoin trading, it has failed to break out of the box range.

According to the domestic cryptocurrency exchange Upbit, as of 8:30 a.m. on the 2nd, Bitcoin recorded 39.32 million won, down 3.33% from the previous day. After falling to 33.9 million won on the 22nd, it rebounded but has hardly escaped the low 40 million won range. The highest price recorded in the past week was only 42.18 million won.

It was not without positive news. According to U.S. economic media Bloomberg on the 1st (local time), Soros Fund approved Bitcoin and cryptocurrency trading in the funds it manages. Soros Fund is a large hedge fund managing 22 billion dollars (about 24 trillion won). Ark Investment, which boasted tremendous returns last year, submitted an application for an exchange-traded fund (ETF) that tracks Bitcoin returns to the U.S. Securities and Exchange Commission (SEC).

What is holding back cryptocurrency prices is the negative perception of governments around the world. On the 1st, Eun Sung-soo, chairman of the Financial Services Commission, said at the National Assembly’s Political Affairs Committee plenary meeting, "The primary responsibility for managing problems such as money laundering occurring at cryptocurrency exchanges lies with banks," adding, "If banks can handle this issue, they will accept real-name accounts, but if they think they might collapse over a few profits, they will not."

Britain has cracked down on cryptocurrency exchanges. On the 25th of last month, the UK Financial Conduct Authority (FCA) announced that Binance’s UK entity, ‘Binance Markets Limited,’ cannot operate in the UK without prior consent. Subsequently, it blocked cash withdrawals from Binance accounts and drew a line by stating that investors will receive no assistance from authorities when investing in cryptocurrencies.

Despite such regulations causing Bitcoin prices to fall more than 50% compared to April, institutional investor participation remains subdued. On the 29th of last month, Nikolaos Panigirtzoglou, JP Morgan’s investment strategist, analyzed, "Institutional investors who led Bitcoin’s rise in Q4 last year and Q1 this year are not visible," explaining, "This is why Bitcoin is trapped in a box range."

In fact, institutional investor participation appears to be decreasing. On the 28th of last month, blockchain data firm Glassnode analyzed in a report that the price of Grayscale’s Bitcoin Investment Trust (GBTC) is lower than its net asset value. GBTC is known as a product usually purchased by institutional investors, and earlier this year, it was so popular that it had to be bought at a premium.

There is also an analysis that this is because Elon Musk, CEO of Tesla, has lost influence. Although he possesses fame, wealth, and uniqueness, he lost trust by showing erratic behavior such as suddenly stopping Tesla’s Bitcoin payment system. On Musk’s birthday on the 28th of last month, people flocked to his Twitter and left harsh comments.

Professor Lee Byung-wook of Seoul School of Integrated Sciences and Technologies said, "CEO Musk played a role as a kind of super-spreader who triggered the cryptocurrency frenzy," adding, "Unless a comparable figure appears, a rebound will not be easy."

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