[Bitcoin Now] Powell's Fed Chair Reappointment Causes 70 Million KRW Level Collapse

Possibility of Liquidity Reduction to Curb Inflation Increases
NFL Player Accepts Salary in Bitcoin

[Image source=EPA Yonhap News]

[Asia Economy Reporter Gong Byung-sun] The leading cryptocurrency Bitcoin has fallen below the 70 million KRW mark. Jerome Powell, Chairman of the U.S. Federal Reserve (Fed), being reappointed is interpreted as a signal for liquidity reduction to address inflation concerns.

According to the domestic cryptocurrency exchange Upbit, at 5:22 PM on the 23rd, Bitcoin recorded 69.55 million KRW, down 1.46% from the previous day. After dropping to 69.15 million KRW on the 19th, it fell below the 70 million KRW mark again after four days. Earlier this month, Bitcoin reached an all-time high of 82.7 million KRW. At 6:13 PM on the same day, Bitcoin was recorded at 70.22 million KRW, down 0.51% from the previous day.

Concerns about liquidity reduction appear to have negatively impacted Bitcoin prices. On the 22nd (local time), U.S. President Joe Biden announced at a White House press conference that Chairman Powell would be reappointed. At this event, Chairman Powell stated, “We will use all available tools to prevent higher inflation from becoming entrenched,” expressing a strong commitment to combating inflation.

Not only Chairman Powell but also the U.S. government expressed concerns about inflation and emphasized the Fed’s role. U.S. Treasury Secretary Janet Yellen said, “In the long term, the Fed must play a decisive role to ensure inflation does not become endemic,” and added, “I believe Chairman Powell will fulfill that role.”

Bitcoin began to surge during the period when governments worldwide injected liquidity to overcome the economic crisis caused by COVID-19. Bitcoin, which had fallen to 5.98 million KRW on March 12 last year, rose more than tenfold within a year. In fact, on March 17, after Chairman Powell drew a line on the possibility of tapering asset purchases following the Federal Open Market Committee (FOMC) meeting, Bitcoin rebounded by 3.75%.

Meanwhile, a player in the National Football League (NFL) decided to receive his one-year salary in Bitcoin. According to U.S. economic media Bloomberg on the 22nd, Odell Beckham Jr. signed a one-year contract with the Los Angeles Rams. The contract includes a base salary of $750,000 (approximately 892.12 million KRW), a signing bonus of $500,000 for new players joining the team, and incentives up to $3 million based on team performance.

Beckham decided to receive the base salary of $750,000 in Bitcoin. He partnered with the U.S. financial company Square and will receive Bitcoin through Square’s cryptocurrency wallet, Cash App. He said on Twitter, “To commemorate today, I will donate $1 million worth of Bitcoin to fans.”