[Bitcoin Now] Declining Trading Volume... Slight Rebound to Around 61 Million Won

Global Financial Authorities Adopting Hawkish Stance
Risk Aversion Likely to Spread if Liquidity Tightens

[Image source=Yonhap News]

[Asia Economy Reporter Gong Byung-sun] The leading cryptocurrency Bitcoin slightly rose to the 61 million KRW range. However, trading volume in the cryptocurrency market has sharply decreased, causing investor sentiment to waver.

According to the domestic cryptocurrency exchange Upbit, as of 2:59 PM on the 27th, Bitcoin recorded 61.5 million KRW, up 0.06% from the previous day. Although it had dipped to 60.28 million KRW the day before, showing some sluggishness, it rebounded again. At 12:26 PM on the same day, it even rose to 61.65 million KRW.

However, the trading value in the cryptocurrency market is rapidly shrinking, leading to a tightening situation. According to the cryptocurrency market data site CoinMarketCap, as of this day, Bitcoin’s 24-hour trading volume was $20.96437 billion (approximately 24.87 trillion KRW). The previous day, it was $19 billion, falling below the $20 billion mark. This is the first time since July 22 that the trading volume dropped below $20 billion. At that time, Bitcoin’s price had fallen to 37.42 million KRW.

Trading volume at domestic cryptocurrency exchanges is also sluggish. As of this day, Upbit’s 24-hour trading volume was $2.6862 billion, approximately 3.1861 trillion KRW. On the 16th of last month, Upbit’s 24-hour trading volume was about 18.7542 trillion KRW, surpassing the KOSPI’s 11.1012 trillion KRW on the same day, but it has sharply decreased within a month. Other exchanges show similar trends. Bithumb’s 24-hour trading volume was $592.75 million, Coinone’s was $164.05 million, and Korbit’s was only $10.17 million.

The stagnation in the cryptocurrency market is presumed to be due to the upcoming shift in the global economic policy stance. Monetary policies that had been easing liquidity are beginning to shift toward a hawkish stance. Hawkish means adopting a tightening tendency when signs of economic overheating appear. When a hawkish stance is taken, risk-asset avoidance sentiment inevitably spreads.

On the 15th (local time), the U.S. Federal Open Market Committee (FOMC) announced that it would move up the end date of asset purchase tapering, originally scheduled for June next year, to March. This is equivalent to advancing the timing of interest rate hikes. Additionally, the European Central Bank (ECB), which had shown a relatively accommodative attitude, also decided to end the Pandemic Emergency Purchase Programme (PEPP) early in March next year.