Gold and Silver Rise, Bitcoin Also Surges

Continuous Rise... $12,000 Within Reach
Stock Market: "Different from the 2017 Boom"

[Asia Economy Reporter Minji Lee] Amid abundant market liquidity and record highs in safe-haven assets like gold, Bitcoin is also showing an upward trend. As the dollar weakens and expectations for further declines in real interest rates strengthen, there is speculation that liquidity will shift toward digital currencies.

According to CoinMarketCap, an overseas cryptocurrency market data company, as of 10 a.m., Bitcoin was trading at around $11,748, up 4.7% from the previous session. Bitcoin surpassed $10,000 on the 27th of last month and has been rising steadily, approaching the $12,000 mark. This is the first time Bitcoin has exceeded $10,000 since September last year. On the domestic cryptocurrency exchange Bithumb, Bitcoin has also surged since the end of last month. Bitcoin entered the 13 million KRW range on the 28th of last month and closed at 13,753,000 KRW on the previous day. Compared to early July (11,019,000 KRW), the price has surged about 25% in just over a month.

Other cryptocurrencies are showing similar trends to Bitcoin. Ethereum, which traded at 270,600 KRW in early last month, has surged 73% as of the previous day's price. Ripple (69%), Qtum (65%), Ethereum Classic (24%), Litecoin (40%), and TRON (15%) all showed varying rates of increase but have all risen significantly compared to last month.

This trend coincides with the recent rise in gold prices. December delivery gold on the New York Mercantile Exchange closed at $2,049.30 per troy ounce, marking a four-day consecutive increase. Silver, which has surged 40% since July, also showed a four-day consecutive rise. Bloomberg stated, "Bitcoin is showing a short-term correlation with gold," and predicted, "If gold rises to $3,000, Bitcoin could reach $18,000."

The massive inflow of funds is attributed to the same reasons behind the sharp rise in gold and silver. In an environment of a weak dollar and negative real interest rates, the appeal of inflation-hedge assets increases, and liquidity is flowing into representative cryptocurrencies like Bitcoin, which is likened to gold in the digital market. Hwang Byung-jin, a researcher at NH Investment & Securities, said, "The low-interest-rate environment driven by monetary easing led by the U.S. Federal Reserve has strengthened the investment appeal of safe-haven assets," adding, "The rise in expected inflation due to oil price increases is boosting demand for inflation-hedge assets."

In the securities industry, the current upward trend is expected to differ from the 2017 'Bitcoin frenzy.' At that time, regulations and technical verification of blockchain for alternative assets like Bitcoin were not established, but the current situation is different.

Han Dae-hoon, a researcher at SK Securities, explained, "U.S. banks such as Goldman Sachs and Bank of America (BOA) have obtained licenses for cryptocurrency custody services, and considering that our government plans to enforce the Act on Reporting and Using Specified Financial Transaction Information (Special Financial Transactions Act) starting March next year, this is seen as progress compared to 2017," adding, "It is also important to consider that global platform companies are incorporating Bitcoin-related sectors into their businesses."