Sky-High Surge... Bitcoin and Gold Prices Soar

Bitcoin Surpasses $72,000
Gold Prices Rise on Interest Rate Cut Expectations

Leading cryptocurrency Bitcoin and the representative safe-haven asset gold are soaring side by side, breaking record highs. This is due to expectations that major central banks, including the U.S. Federal Reserve (Fed), will cut interest rates within the year, combined with various positive factors. Following Bitcoin, known as "digital gold," and gold prices, silver prices are also rising.

Bitcoin Surpasses $72,000 on ETN Boost

According to cryptocurrency exchange Coinbase, on the 11th (local time) at around 7:40 a.m. Eastern Time, Bitcoin price surpassed $72,000 per coin. After breaking the $70,000 mark for the first time on the 8th, it has been setting new record highs daily. The increase since the beginning of the year is close to 70%. On the same day, Ethereum price also exceeded $4,000 for the first time since December 2021. On domestic exchanges, Bitcoin price surpassed 100 million KRW per coin for the first time ever.

This upward trend is attributed to positive factors such as expectations of Fed interest rate cuts, the trading of Bitcoin spot Exchange-Traded Funds (ETFs), and the halving event scheduled for April. Bloomberg estimated that since the U.S. approved Bitcoin ETFs in January, inflows have reached $10 billion (approximately 13 trillion KRW).

In particular, the approval possibility hinted by the UK regulatory authority for cryptocurrency-related Exchange-Traded Notes (ETNs) on this day is seen as pushing prices higher. The UK Financial Conduct Authority announced that it would not oppose the exchange's request to approve cryptocurrency ETN trading. The London Stock Exchange also confirmed in a separate statement that it will accept listing applications for Ethereum ETNs alongside Bitcoin starting from the second quarter. U.S. economic media CNBC reported, "Bitcoin bulls expect additional institutional investors to flow in with the approval of cryptocurrency ETNs," suggesting that the price rally may continue for the time being.

Gold Strengthens on Interest Rate Cut Expectations... Silver Follows

The market is paying attention to the fact that along with the Bitcoin rally, the price of gold, a traditional safe-haven asset, is also soaring. This confirms an "everything rally" where all assets rise simultaneously. According to the New York Commodity Exchange (COMEX), April delivery gold futures closed at $2,188.60 per ounce, up $3.10 from the previous trading day. During the session, prices nearly reached $2,200 per ounce. Recently, gold prices have been moving at the highest levels since gold futures were launched in 1979.

Marcus Garvey, Head of Commodity Strategy at Macquarie, evaluated, "Expectations of interest rate cuts have recently supported gold prices." Matt Simpson, Senior Analyst at City Index, also stated, "There is clearly demand for gold while Fed interest rate cuts are expected." Typically, when expectations for interest rate cuts strengthen and the dollar weakens, gold prices tend to rise. Additionally, geopolitical and economic uncertainties such as Russia's invasion of Ukraine, the war between Israel and the Palestinian militant group Hamas, and China's economic slowdown also support gold prices. Garvey predicted that gold prices could rise to $2,300 per ounce depending on U.S. inflation and employment data.

As gold prices continue their rally, Wall Street is increasingly focusing on silver. The recent rise in silver prices is comparable to that of gold. On this day, silver futures traded around $24 per ounce. Silver, which is both a precious metal investment asset and an industrial metal, is used in various applications such as solar panels, automobiles, and home appliances. Due to this, optimistic forecasts suggest that silver prices could surpass gold's rise and reach $30 per ounce, the highest level in the past 10 years, if the global economy improves.

Randy Smallwood, CEO of Wheaton Precious Metals, previously appeared on CNBC and predicted, "We will see gold prices rise first, followed by a rapid increase in silver prices." This year, global silver demand is estimated at 1.2 billion ounces, the second-largest ever.