[Bitcoin Now] Drops 10% on US CPI Shock... Related Stocks Also Plummet

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Myunghwan Lee] Bitcoin was not spared from the sharp drop in the US Consumer Price Index (CPI). Until the day before, it rebounded and stayed above 30 million KRW, but it fell nearly 10% in less than a day.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 10:03 AM on the 14th, the price of Bitcoin was recorded at $20,210 (approximately 28.16 million KRW), down 9.01% from the previous day. Bitcoin was trading around $22,600 until 9 PM the previous night, but it dropped more than $2,000 within 12 hours after the release of the US August Consumer Price Index (CPI).

Previously, Bitcoin had been trading above 30 million KRW until the day before, raising expectations for a rebound. The price of Bitcoin surpassed 30 million KRW for the first time in about a month since August 19. In just 12 hours, Bitcoin gave back the gains it had made over the past five days.

The decline on this day is interpreted as a result of the US CPI coming in higher than expected. The US August CPI, announced on the 13th (local time), rose 8.3% compared to the same month last year, exceeding the market forecast of 8.0%. Despite the drop in international oil prices, the rise in CPI revived inflation fears, causing the US stock market to plunge sharply. The Nasdaq index, which shows a correlation with Bitcoin prices, closed down 5.16% (632.84 points) at 11,633.57, marking the largest single-day drop in two years and three months.

Major altcoins also could not avoid the overall sharp decline in cryptocurrencies. At the same time, Ethereum, which is preparing for the Merge update, fell 7.30% to $1,569 (approximately 2.18 million KRW), and Solana dropped 10.13% to $33.28 (approximately 46,300 KRW).

Bitcoin-related stocks listed on the domestic stock market also plunged, wiping out the previous day's rebound. At the same time, Vidente, the largest shareholder of the domestic cryptocurrency exchange Bithumb, traded down 4.39% (350 KRW) to 7,620 KRW, along with WIZIT (-4.66%) and Wooree Technology Investment (-4.98%), all showing a downward trend. These stocks had all closed with gains of over 5% the previous day, supported by the strong domestic stock market and rising Bitcoin prices.

However, some analysts predict that a rebound is possible if further deterioration in Bitcoin prices can be prevented. Edward Moya, Senior Market Analyst at global investment firm OANDA, said, "Most investors are negative about a cryptocurrency rebound, but if Bitcoin prices do not fall further from here, market participants could trigger an upward movement."