[Bitcoin Now] Falls Over 2% Amid Tightening Concerns... Investor Sentiment at 'Extreme Fear'

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] As concerns over tightening dominate the cryptocurrency market, Bitcoin prices are also weak.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 9:24 a.m. on the 16th, Bitcoin was priced at $19,669 (approximately 27.47 million KRW), down 2.70% from the previous day. Although it recovered to the $20,000 range the day before, it fell back to the $19,000 range again.

Bitcoin prices are declining amid concerns that the Federal Reserve (Fed) will continue aggressive tightening at the September Federal Open Market Committee (FOMC) meeting. The U.S. Consumer Price Index (CPI) for August rose 8.3% compared to the same month last year, exceeding the market forecast of 8.0%. The U.S. Producer Price Index (PPI) for August slowed for the second consecutive month, but inflation concerns remain. While a 0.75 percentage point increase in the benchmark interest rate is expected, there are also worries that a 1 percentage point hike might be possible. Meanwhile, August retail sales increased by 0.3% month-over-month, surpassing expectations. Consumption continues despite high inflation.

The U.S. stock market, which is also showing synchronization with concerns over prolonged inflation, closed lower. On the 15th (local time), the Nasdaq index, centered on technology stocks, fell 167.32 points (1.43%) to 11,552.36, the Dow Jones Industrial Average dropped 173.27 points (0.56%) to 30,961.82, and the large-cap S&P 500 index recorded 3,901.35, down 44.66 points (1.13%).

At the same time, Ethereum, the leading altcoin, traded at $1,472 (approximately 2.06 million KRW), down 9.71% from the previous day despite the successful Merge upgrade. As the saying goes, "Buy the rumor, sell the news," prices are moving accordingly, and tightening concerns are driving the weakness.

The Merge upgrade aims to switch the Ethereum blockchain algorithm from the existing Proof of Work (PoW) method to Proof of Stake (PoS). Proof of Work involves participating in the blockchain through computer calculations and receiving coins as rewards, while Proof of Stake means staking held cryptocurrencies in the blockchain to participate in verification and creation, receiving coins as compensation. The Merge upgrade is expected to partially resolve carbon emission issues.

Investor sentiment has also weakened. According to cryptocurrency data provider Alternative, the Fear & Greed Index, which measures investor sentiment, dropped 8 points from the previous day to 20 points (extreme fear). Alternative's Fear & Greed Index ranges from 0 points, indicating extreme fear and pessimism about investment, to 100 points, indicating optimism.

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