Bithumb Economic Research Institute: "Bitcoin Gains Spotlight When Traditional Financial Assets Shake"

[Asia Economy Reporter Myung-hwan Lee] An analysis has emerged suggesting that Bitcoin, the leading cryptocurrency, could emerge as an alternative to traditional financial assets.

Bithumb Economic Research Institute, affiliated with the cryptocurrency exchange Bithumb, analyzed on the 13th that "Bitcoin can stand out as an alternative asset when traditional financial assets such as fiat currencies, stocks, and bonds face downward pressure."

In the report titled "Shaky Fiat Money, Surge in Bitcoin Demand?" released that day, Bithumb Economic Research Institute explained that Bitcoin prices remained stable despite the recent Credit Suisse default and the British Pound crisis. According to the institute, while the S&P 500 index fell by 6.7% over the past month since mid-September, Bitcoin only declined by 2.5%.

So far, in some emerging countries including El Salvador, citizens have preferred Bitcoin due to a lack of trust in their national currencies. However, the institute noted that a similar pattern was observed in the UK last month, confirming a meaningful possibility that Bitcoin could be adopted as one of several alternative means to advanced country currencies.

According to the report, the British Pound plummeted to an all-time low of 1.06 dollars against the dollar on the 26th of last month. On the same day, the trading volume of Bitcoin denominated in Pounds surged more than tenfold compared to usual. The institute analyzed that Bitcoin, as an alternative asset, gained attention as the Pound's value dropped due to concerns over deficit bond issuance following the UK government's announcement of a large-scale tax cut plan for economic stimulus.

Lee Mi-seon, Head of the Research Center at Bithumb Economic Research Institute, predicted, "If the UK attempts economic stimulus again through large-scale government bond issuance or if vulnerabilities in UK government bonds are exposed, the value of the Pound could be shaken, strengthening incentives to reduce government bonds and purchase Bitcoin."