[Bitcoin Now] Decline Continues Amid Uncertainty... 'Gorae' Steps Up Buying

by Lee Jungyun

Published 17 Apr.2022 16:00(KST)

Updated 06 Mar.2023 18:12(KST)

[Image source=Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] As uncertainties such as concerns over a U.S. interest rate hike continue, the price of Bitcoin, the representative cryptocurrency, is showing a downward trend.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 3:50 p.m. on the 17th, the price of Bitcoin was $40,364 (approximately 49.63 million KRW), down 0.23% from the previous day.

The price of Bitcoin has been weakening continuously since the possibility of another U.S. interest rate hike was raised. John Williams, President of the New York Federal Reserve Bank, said on the 14th of this month (local time) that a 0.5 percentage point rate hike in one go, a "big step," is a "reasonable option." On the following day, the 15th, the price fell by more than 3%. Earlier on the 5th of this month, Lael Brainard, nominee for Vice Chair of the Federal Reserve, stated that "lowering inflation is the most important," referring to aggressive rate hikes, which also led to a price decline.

Experts explain that Bitcoin prices may show sharp volatility going forward. Paul Robinson, a strategist at DailyFX, said, "Due to the measures taken over the past three months that led to Bitcoin price contraction, the situation could change rapidly in the short term," adding, "However, considering the nature of volatility and that it is a characteristic of Bitcoin, volatility may increase again toward the middle of this year."

However, there is also a forecast that the so-called "whales," those who invest heavily in cryptocurrencies, buying Bitcoin could act as a positive factor. Michael Saylor, CEO of U.S. software company MicroStrategy, said in a shareholder letter on the 14th of this month, "We have achieved 'tremendous success' in increasing shareholder value through multi-billion-dollar Bitcoin purchases." He added, "Deciding to hold Bitcoin as an asset has differentiated us from existing competitors and enhanced our brand," and announced plans for additional purchases. Furthermore, CEO Saylor stated that he has spent $3.97 billion (approximately 4.8811 trillion KRW) to acquire 129,218 Bitcoins so far.

Meanwhile, the Digital Asset Fear & Greed Index by Dunamu, which operates the domestic cryptocurrency exchange Upbit, recorded 48.29 on the day, indicating a "neutral" stage. Compared to 50.71 (neutral) on the 10th of this month, a week earlier, it fell by 2.42. Dunamu's Digital Asset Fear & Greed Index is divided into stages of "Extreme Fear (0?20)," "Fear (20?40)," "Neutral (40?60)," "Greed (60?80)," and "Extreme Greed (80?100)." The greed direction indicates increased interest in buying by market participants, while moving toward fear indicates a fear of asset decline, causing market exits and a chain reaction of price drops.