Bitcoin Plummets Below $30,000 for the First Time Since February
Coinbase, Listed Last Month in the US, Hits Record Low
Domestic Cryptocurrency Exchange-Related Stocks Also Fall Over 5% Early in Trading
[Asia Economy Reporter Minwoo Lee] Cryptocurrency prices have plummeted due to various overlapping negative factors, causing related stocks both domestically and internationally to falter.
As of 9:26 a.m. on the 20th, according to CoinMarketCap, which tracks global cryptocurrency market conditions, the price of Bitcoin dropped 14.28% compared to 24 hours earlier, reaching $37,028 (approximately 41.94 million KRW). Around 10 p.m. the previous day, it even fell to $33,681. This is the lowest price since January 28, when it dropped to $30,023. After a steep rise, the $30,000 level is now at risk of collapsing for the first time in about four months. Compared to the $64,863 recorded on the 14th of last month, the price has halved.
The crash is attributed to Tesla CEO Elon Musk's 'whims' and the Chinese authorities' 'Bitcoin ban.' Earlier, Tesla announced a $1.5 billion purchase of Bitcoin in February, which triggered a sharp price increase. Subsequently, CEO Musk led the surge by stating that Tesla would accept Bitcoin for its electric vehicles. However, on the 12th, he suddenly announced the suspension of Bitcoin payments, citing environmental concerns. This caused the total market capitalization of cryptocurrencies to evaporate by $300 billion in a single day, shaking the market. This week, Tesla posted a tweet that could be interpreted as having sold all its Bitcoin, causing further market confusion. The company later clarified within a day that it had not sold its Bitcoin.
Amid this situation, the Chinese financial authorities' announcement prohibiting private cryptocurrency trading instilled fear among investors. The day before, three organizations?the China Banking Association, China Internet Finance Association, and China Payment and Clearing Association?jointly issued a notice titled "Announcement on the Risks of Cryptocurrency Trading and Speculation," emphasizing that "cryptocurrency speculation disrupts normal financial order and is not real currency, so it should neither be used nor allowed in the market." Although this stance has been maintained previously, issuing the announcement at this time heightened concerns about additional regulations.
Consequently, cryptocurrency-related stocks both domestically and internationally took a direct hit. Coinbase, listed on the U.S. Nasdaq on the 14th of last month (local time), closed at $224.80 on the 19th (local time), down 5.94% from the previous day. Considering it surged to $429 on its first day of listing, this represents a drop to about half its value. MicroStrategy, known as the private company holding the most Bitcoin, and Bitcoin mining company Riot Blockchain also closed down by 6.64% and 5.56%, respectively.
Domestic cryptocurrency-related stocks are also struggling. Woori Technology Investment and Atinum Investment, each holding about 8% stakes in Dunamu, the operator of the domestic cryptocurrency exchange Upbit, fell 5.89% and 6.44%, respectively, as of 9:26 a.m. Meanwhile, Vidente, which holds shares in the cryptocurrency exchange Bithumb, also dropped 8.48% at the same time.
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