Bitcoin Surges to 50 Million Won in One Month... Market Cap Falls Below 1 Trillion Dollars

Steep Rise Reversed... Financial Authorities' Warning Remarks Trigger Sharp Decline

[Asia Economy Reporter Minwoo Lee] The price of Bitcoin, the leading cryptocurrency, which had surged sharply over about a month to nearly 82 million KRW, plummeted to the 50 million KRW range within ten days. This is interpreted as the financial authorities' warning remarks having a negative impact on the market.

According to the domestic cryptocurrency exchange Upbit on the 23rd, as of 9:07 a.m., the price of Bitcoin fell to 59 million KRW. Considering that it recorded 69 million KRW the previous day, it dropped by 10 million KRW in just one day. Bitcoin falling to the 50 million KRW range is the first time since the 9th of last month. It had drawn an upward curve since early last month and reached an all-time high of 81.99 million KRW on the 14th, but returned the gains accumulated over ten days.

The sharp decline began on the 19th. The government judged the cryptocurrency investment fever to be at a ‘mania’ level and announced that a joint special crackdown on illegal activities related to virtual assets would be conducted by relevant ministries from April to June. On that day alone, the price of Bitcoin dropped by more than 6 million KRW. Subsequently, rumors spread on Twitter that the U.S. Treasury Department would investigate ‘money laundering’ using cryptocurrencies, causing the overall market to shrink. Bitcoin prices, which had maintained the 70 million KRW range this month, fell back to the 60 million KRW range on that day.

Negative remarks about cryptocurrency investment by Eun Sung-soo, the Financial Services Commission chairman, the previous day also acted as a catalyst for the plunge. At a plenary meeting of the Political Affairs Committee held at the National Assembly, when ruling and opposition lawmakers asked about the government’s investor protection measures related to cryptocurrencies, Chairman Eun said, "In the stock market or capital market, there are investors and investors are protected, but the government cannot protect everyone who has entered these virtual assets," adding, "If they go down the wrong path, adults have to tell them."

Although the decline is less severe compared to the domestic market, Bitcoin weakness is also appearing on overseas exchanges. According to CoinMarketCap, which relays global cryptocurrency market conditions, as of 9:40 a.m. on that day, the price of Bitcoin recorded $51,692 (approximately 57.84 million KRW), down 4.71% from the previous day. The market capitalization also fell below $1 trillion, totaling $967.3021 billion.

Dogecoin, which recently surged thanks to mentions by Elon Musk, Tesla CEO, and ‘Doge Day,’ despite having no technical value or ongoing projects, also plunged to about half its value in three days. It recorded 393 KRW the previous day but was traded at 306 KRW at 9:40 a.m. Considering it rose to 575 KRW on the 19th, it plunged about 47% in three days.