[Bitcoin Now] Decline Amid Ongoing Ukraine Crisis and Concerns Over US Interest Rate Hike

[Asia Economy Reporter Lee Jung-yoon] The leading cryptocurrency Bitcoin is showing a downward trend. It is analyzed that geopolitical uncertainties and concerns over the U.S. interest rate hikes continue to have an impact.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 11:25 a.m. on the 15th, the price of Bitcoin was $40,053 (approximately 49.29 million KRW), down 3.19% from the previous day.

The price of Bitcoin is declining due to the Ukraine crisis and macroeconomic uncertainties. Cryptocurrency specialized media CoinDesk explained on the same day, "Concerns about macroeconomic and geopolitical risks persist, causing some investors to take a wait-and-see stance." Russian President Vladimir Putin stated, "Peace negotiations with Ukraine have reached a dead end," and "Russia will continue military operations until the mission is accomplished."

Additionally, the possibility of a U.S. interest rate hike also appears to have driven Bitcoin's price down. John Williams, President of the Federal Reserve Bank of New York, said on the 14th (local time) that a 0.5 percentage point rate hike in one go, known as a big step, is a "reasonable option." He also confirmed that rate hikes are necessary to control inflation.

Earlier, on the 5th of this month, Lael Brainard, nominee for Vice Chair of the Federal Reserve, made aggressive remarks about rate hikes, which also affected Bitcoin prices. Brainard said, "Lowering inflation is the most important," and "The Federal Reserve (Fed) will begin rapid balance sheet reduction immediately after the May meeting (Federal Open Market Committee (FOMC)) and will systematically tighten monetary policy through consecutive rate hikes." At that time, Bitcoin fell by about 3%.

Meanwhile, the Digital Asset Fear & Greed Index by Dunamu, which operates the domestic cryptocurrency exchange Upbit, recorded 45.77 on the day, indicating a 'neutral' stage. Compared to 50.57 (neutral) on the 8th of this month, a week earlier, it fell by 4.8 points. Dunamu's Digital Asset Fear & Greed Index is divided into stages of 'Extreme Fear (0?20)', 'Fear (20?40)', 'Neutral (40?60)', 'Greed (60?80)', and 'Extreme Greed (80?100)'. The greed direction indicates increased interest in buying by market participants, while moving toward fear indicates a fear of asset decline, leading to market exits and a chain reaction of price drops.