[Bitcoin Now] Plunges to $36,000 Amid US Stock Market Crash

[Image source=Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] After the U.S. Federal Reserve (Fed) raised the benchmark interest rate by 0.5 percentage points, the U.S. stock market plummeted, causing the price of the leading cryptocurrency Bitcoin to also fall sharply.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 9:37 a.m. on the 6th, the price of Bitcoin was $36,493 (approximately 46.45 million KRW), down 7.84% from the previous day. This is the first time Bitcoin has recorded a price in the $36,000 range since February 25.

Bitcoin prices declined as the Nasdaq index, which is technology stock-centered and shows synchronization phenomena, plunged. On the 5th (local time), the Nasdaq index fell by 647.16 points (4.99%) to 12,317.69. The Dow Jones Industrial Average closed at 32,997.97, down 1,063.09 points (3.12%) from the previous session.

After the Fed raised the benchmark interest rate by 0.5 percentage points as expected by the market the previous day, there was a relief rally, but the U.S. stock market crashed within a day. Although Fed Chair Jerome Powell stated that a 0.75 percentage point rate hike was "not actively being considered," the Fed hinted at raising rates by an additional 50 basis points (1 bp = 0.01 percentage points) in the next two meetings, maintaining market concerns about tightening.

The cryptocurrency specialized media CoinDesk evaluated, "Due to the influence of the New York stock market, Bitcoin prices fell below $36,000, triggering a strong sell-off." Joe DiPascal, CEO of BitBull Capital, said, "Although there was an initial surge in Bitcoin prices, it is not separated from macroeconomic changes, and today's price reflects this."

Meanwhile, the Digital Asset Fear & Greed Index of Dunamu, which operates the domestic cryptocurrency exchange Upbit, recorded 40.76 on the day, indicating a 'neutral' stage. Compared to 49.08 (neutral) on the 4th of this month, it dropped by 8.32. 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, whereas moving toward fear indicates a fear of asset decline, leading to market exits and a chain reaction of price drops.