[Bitcoin Now] Shaken by Interest Rate Hike Fears... Related Stocks and Funds Also Waver

Jerome Powell Fed Chair Acknowledges Inflation Pressure Impact
Bitcoin-Related Stocks and Funds Also Decline

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[Asia Economy Reporter Gong Byung-sun] The leading cryptocurrency Bitcoin has fallen to the 54 million KRW range. It appears that Federal Reserve (FED) Chairman Jerome Powell's failure to quell inflation fears acted as a negative factor. Stocks and funds related to Bitcoin also experienced significant declines.

According to the domestic cryptocurrency exchange Upbit, as of 10:45 AM on the 5th, Bitcoin was recorded at 54,814,000 KRW, down about 2.9% from the previous day. This represents a drop of approximately 7.3% compared to the high of 59,159,000 KRW recorded at 11:09 AM the previous day.

This seems to be influenced by Chairman Powell's acknowledgment of inflationary pressures. On the 4th (local time), according to US economic media Bloomberg, Powell said at the Wall Street Journal (WSJ) 'Jobs Summit' event, "There are inflationary pressures, but they are temporary, so we will be patient." He also added, "We are concerned about financial market disorder caused by rising US Treasury yields," and "We are watching not only US Treasury yields but the overall market." Unlike before, he acknowledged the pressure from inflation. At a Senate Banking Committee hearing on the 23rd of last month (local time), Powell dismissed inflation concerns by stating, "We will maintain zero interest rates for employment and prices."

Immediately after Powell's remarks, the US 10-year Treasury yield rose from the mid-1.4% range to as high as 1.56% during the session. This caused not only the US stock market but also the cryptocurrency market to be shaken by fears that liquidity might decrease. Earlier, on the 25th of last month, when the US Treasury yield exceeded 1.5%, Bitcoin fell 4.13% compared to the previous day.

Related stocks also plunged sharply. On this day, Bitcoin-related stocks fell more sharply than the Nasdaq index (which closed down 2.11%). Among private companies, MicroStrategy, which holds the most Bitcoin, dropped 11.74% ($85.91) to close at $645.66. Bitcoin mining company Riot Blockchain also fell 10.65% ($5.28) to close at $44.29.

Bitcoin-related funds were not spared from the negative impact. Grayscale's Bitcoin Investment Trust (GBTC) fell 10.31% ($4.76) to $41.40. Bitcoin exchange-traded funds (ETFs) listed on the Canadian stock market are also cooling off as the cryptocurrency market has recently become unstable. According to Bloomberg on the 3rd (local time), the trading volume of the 'Purpose Bitcoin ETF' listed on the Toronto Stock Exchange (TSX) on the 2nd was $17 million (approximately 19.24 billion KRW). This was less than 5% of the $400 million trading volume during the first two days after its listing on the 18th of last month (local time).