[Bitcoin Now] Falling to 43 Million Won Amid FOMC Anxiety

Major US Institutions Expect Strong Tightening Policies
UBS: "Blockchain Is Crude and Far from Decentralization"

[Image source=Yonhap News]

[Asia Economy Reporter Gong Byung-sun] The leading cryptocurrency Bitcoin has fallen to the 43 million KRW range. Ahead of the U.S. Federal Open Market Committee (FOMC) meeting, concerns over liquidity tightening such as quantitative tightening have led to a sluggish cryptocurrency market. Additionally, there are analyses suggesting that the cryptocurrency market may continue to underperform this year.

According to the domestic cryptocurrency exchange Upbit, as of 1:20 PM on the 24th, Bitcoin recorded 43.31 million KRW, down 2.11% from the previous day. On the 16th, it was still in the 52 million KRW range, but the downward trend continued, falling below the 50 million KRW mark. On the 21st alone, it plunged 8.73%. This is the first time Bitcoin has recorded the 43 million KRW range since July 27 of last year.

Uncertainty related to the U.S. FOMC appears to be negatively affecting the cryptocurrency market. On the 26th (local time), the FOMC is scheduled to conclude its meeting and release a statement. On the 5th, the U.S. Federal Reserve (Fed) revealed through the minutes of last month's FOMC meeting that it discussed quantitative tightening. Quantitative tightening refers to a monetary policy that reduces market liquidity by not reinvesting in bonds held when they mature. It is known to be a stronger tightening policy than asset purchase reduction (tapering).

Key U.S. figures and institutions expect a tightening policy equivalent to quantitative tightening. According to U.S. financial media Yahoo Finance on the 14th, Jamie Dimon, CEO of the major U.S. investment bank JPMorgan, stated, “The Fed may raise interest rates 6 to 7 times this year.” The major U.S. investment bank Goldman Sachs also expects the Fed to raise rates four times this year.

There are also views that the cryptocurrency market will no longer rise this year. According to U.S. financial media Business Insider on the 22nd, James Malcolm, Head of Foreign Exchange Strategy at global financial firm UBS, said, “The technological capabilities and regulatory issues of cryptocurrencies will cause the market to underperform,” pointing out that “blockchain technology is crude and far from decentralized.” He also added, “If blockchain is the next-generation technology, it is questionable why Google is not making large-scale investments.”