Jung Tae-young, Vice Chairman of Hyundai Card, Says Cryptocurrency Seems to Be Passing the 'Dutch Tulip' Stage

Gaining Strong Siblings: Non-Fungible Tokens (NFT) and Metaverse

Chung Tae-young, Vice Chairman of Hyundai Card

[Asia Economy Reporter Ki Ha-young] Jung Tae-young, Vice Chairman of Hyundai Card, evaluated that the cryptocurrency market seems to be passing through the overheated speculative phase known as the ‘Dutch Tulip’ stage. Last year, he criticized cryptocurrencies for lacking references and order, likening investments to blind (uninformed) speculation, but his stance has somewhat changed.

According to financial circles on the 20th, Vice Chairman Jung posted on his Facebook the day before, stating, "Cryptocurrency has gained strong siblings in non-fungible tokens (NFTs) and the metaverse."

He added, "It can be seen that cryptocurrencies now have proper use cases, and investment in cryptocurrencies has become an opportunity for diversified investment in digital culture and digital real estate," and mentioned, "Although there will still be fluctuations, it seems that cryptocurrencies are now moving past the ‘Dutch Tulip’ phase."

The Tulip Bubble incident was a representative case of a speculative bubble caused by overheated speculation on tulips in 17th century Netherlands. Concerns have continuously been raised that virtual assets like Bitcoin might follow a similar path, but Vice Chairman Jung has presented a changed view on virtual assets.

Previously, in April last year, Vice Chairman Jung, while stating "I don’t know" about cryptocurrencies, expressed that the reason he felt uneasy about cryptocurrencies was due to the lack of references and order.

He said, "(Cryptocurrency) is an issue not of usefulness as a payment method but of legitimacy as an investment target," and added, "I do not agree with the argument that cryptocurrencies are risky because they are not issued by central banks." Regarding the claim that cryptocurrencies are unstable because they are conceptual rather than physical, he said, "Index funds, exchange rates, and options are also familiar but ultimately are concepts created by humans," adding that this is not a good explanation.

He analyzed, "The reason for feeling more uneasy about cryptocurrencies is precisely because references and order are very weak." Vice Chairman Jung explained, "The price of gold can be compared with silver and copper prices, so it cannot fluctuate arbitrarily on its own," and "The dollar is on the same shelf as other currencies, and although stock prices fluctuate greatly, there is a consensus on valuation."

He continued, "Indexes have reference groups, and oil has a long history and substitutes," and "In that sense, cryptocurrencies have weak use cases, references, and valuations, and whether they rise or fall, there is no proper way to explain it, making investments close to blind speculation."

However, within a year, virtual assets worldwide have begun to take their first steps toward institutional acceptance. Bitcoin futures exchange-traded funds (ETFs) have been approved in the United States, and El Salvador has officially adopted Bitcoin as legal tender. Domestic presidential candidates from both ruling and opposition parties are also competing to propose policies to activate virtual assets, including considering allowing initial coin offerings (ICOs).