[Bitcoin Now] Highest in 2 Years 3 Months... Expectations and Concerns Coexist

1 Billion Won Milestone in Sight

Bitcoin prices surged last week, reaching the 80 million KRW range. Echoing the rapid rally at the end of 2021, there is both optimism that the '100 million KRW milestone' is not far off and concerns that this is an abnormal situation driven by speculative demand.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 1:10 PM on the 3rd, the price of Bitcoin was 82.63 million KRW, down 0.37% from the previous day. Compared to the previous week, it rose 20.24%, and compared to one year ago, it increased by 177.68%.

Bitcoin prices jumped from the 68 million KRW range on the 26th of last month to the 75 million KRW range on the 27th, quickly surpassing the 70 million KRW mark. The upward trend continued for two consecutive days on the 28th and 29th, reaching a peak of around 83 million KRW. This broke the all-time high recorded in November 2021. However, since March, the price has been consolidating, maintaining a narrow sideways range in the low 80 million KRW range.

It is observed that funds continue to flow into Bitcoin spot exchange-traded funds (ETFs) listed on the U.S. stock market. The UK’s Financial Times (FT), citing K33 Research, reported that 11 funds including BlackRock Asset Management currently hold 303,000 Bitcoin spot units. This amounts to approximately $18 billion (about 24 trillion KRW), representing 1.5% of the total Bitcoin supply.

The halving event in April is a positive factor supporting prices in the first half of the year. In April, the Bitcoin block mining reward will be halved for the first time in four years. According to CoinMarketCap, there are 7,083 blocks remaining until the halving. From April, the Bitcoin mining reward will decrease from 6.25 to 3.125 per block. There is an expectation that reduced supply will lead to price increases.

Robert Kiyosaki, author of the global bestseller "Rich Dad Poor Dad," has predicted that Bitcoin prices will exceed 100 million KRW by June. In January this year, he also forecasted via his social media that Bitcoin prices could rise to $150,000 (about 200 million KRW), an even higher price. Since 2019, he has been optimistic about Bitcoin while predicting a decline in the U.S. stock market. Timo Rehess, co-founder of the blockchain company Swarm, told FT, "This is ridiculous," adding, "We expect more funds to flow in through tokens." He also said, "Such short-term rallies attract people and trigger FOMO." FOMO stands for 'Fear of Missing Out,' referring to the fear of being left out.

On the other hand, warnings about a 'bubble' in the cryptocurrency market are also emerging. Ulrich Bindseil, Secretary General for Market Infrastructure and Payments at the Frankfurt institution, and advisor J?rgen Scharp reiterated long-held views in a European Central Bank (ECB) blog post on the 22nd of last month that "digital currencies pose risks to both society and the environment." They stated, "We do not agree with claims that the approval of Bitcoin spot ETFs confirms that Bitcoin investment is safe and that the previous rally is unstoppable 'proof of victory,'" strongly criticizing that "the fair value of Bitcoin remains zero." They argued that the low-interest-rate environment and the approval of Bitcoin spot ETFs have triggered massive inflows of speculative funds, fueling a price bubble. They added, "The speculative bubble demonstrates the effectiveness of Bitcoin lobbying," emphasizing that "it is important for authorities to remain vigilant and protect society from money laundering, cyber and other crimes, and financial losses of those lacking economic awareness. This has not yet been implemented."