3.18% Drop... Imminent Collapse Below $23,000
IMF "No Official Status Granted to Cryptocurrency"
Major cryptocurrencies, including Bitcoin, which had been on the rise this year, have been held back again by inflation.
According to the US cryptocurrency exchange Coinbase on the 24th (local time), as of 5 p.m. Eastern Time (2 p.m. Pacific Time), the price of one Bitcoin was $23,103 (30.45 million KRW), down 3.18% from 24 hours earlier.
At the same time, Ethereum was also trading at $1,604 (2.11 million KRW), down 2.50%.
Bitcoin had continued its upward trend this year, reaching as high as $25,200 on the 16th.
This marked the first time in six months since August last year that it surpassed the $25,000 level.
However, it then turned downward, falling nearly 8%, dropping below $23,000 during intraday trading, threatening the $23,000 level.
This decline appears to be due to investors' concerns about the Federal Reserve's (Fed) tightening amid renewed inflation instability.
The Consumer Price Index (CPI) released on the 14th showed a 6.4% increase compared to the same month last year, only a 0.1 percentage point decrease from December last year. This indicates a slowdown in the pace of inflation easing.
Retail sales in January rose by 3%, the largest increase in about two years since March 2021, signaling persistent inflationary pressures.
As a result, the New York stock market also saw declines this week, with the Dow Jones Industrial Average down 3%, the S&P 500 down 2.7%, and the Nasdaq down 3.3%, all showing weakness.
Ed Moya, a market analyst at foreign exchange brokerage OANDA, said, "Investors are selling off due to concerns that the Fed might raise interest rates," adding, "With the increased possibility of tightening, all risk assets are under pressure."
IMF: "Cryptocurrencies Should Not Be Recognized as Legal Tender"
Meanwhile, the International Monetary Fund (IMF) has urged countries not to grant cryptocurrencies the status of legal tender.
The IMF released a policy document titled "Effective Policy Elements Related to Crypto Assets" this week, containing nine guidelines to assist member countries in responding to cryptocurrency policies.
The first recommendation in this document is that countries should strengthen their monetary policy frameworks to protect monetary sovereignty and stability, and should not grant cryptocurrencies the status of legal tender or official currency.
The IMF also advised caution regarding excessive capital flows related to cryptocurrencies, recommending clear tax regulations on crypto assets and enhanced supervision of market participants.
The IMF explained that given the collapse of numerous crypto assets and exchanges in recent years, it cannot simply observe the current situation, and these efforts have become a priority for the IMF.
This policy proposal was announced amid the first G20 Finance Ministers and Central Bank Governors meeting of the year, held on the 24th and 25th in Bengaluru, southern India.
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