"Bitcoin Gains Attention as Reserve Currency Noise Intensifies... Highlighted as a Safe Asset"

There is a growing outlook that Bitcoin, a leading virtual asset, will attract attention as an alternative store of value similar to gold, especially as noise surrounding the U.S. credit rating and the dollar’s status as the world’s reserve currency intensifies.

At the 'Digital Asset Mini Forum' held at NH Investment & Securities' headquarters in Yeouido, Seoul, on May 30, Hong Sungwook of NH Investment & Securities stated, "As the perception of Bitcoin as 'digital gold' spreads, the investor base will expand," and added, "In the mid- to long-term, Bitcoin could rise to about 22% of gold’s market capitalization."

NH Investment & Securities assessed that Bitcoin is increasingly taking on the characteristics of a safe asset rather than a risky one. In fact, on May 2, when U.S. President Donald Trump declared 'Liberation Day,' Bitcoin outperformed other assets such as stocks, gold, and long-term U.S. Treasury bonds.

Hong explained, "Since April, as risk appetite returned, Bitcoin prices rose. In May, Bitcoin hit record highs in response to events that increased demand for safe assets, such as the downgrade of the U.S. credit rating." He emphasized, "It is noteworthy that the market has begun to recognize Bitcoin as a safe asset."

He also highlighted the positive trend of Bitcoin’s volatility, one of its main deterrents, decreasing each year. He said, "Bitcoin’s volatility has been declining annually, and if it is further integrated into the institutional system, volatility is expected to decrease even more."

He further noted that the boundary between virtual assets and traditional finance is also diminishing. Strategy (formerly MicroStrategy) and Coinbase have been included in the Nasdaq 100 and S&P 500. He said, "Based on assets under management (AUM), no matter which ETF you choose from the top eight, you cannot avoid exposure to virtual asset-related stocks. More virtual asset-related ETFs are expected to emerge going forward."

NH Investment & Securities identified the passage of the stablecoin bill (Genius Act) as the biggest issue for the virtual asset market in the second half of the year. The Trump administration is pushing for legislation to bring stablecoins into the institutional framework. The bill is expected to pass around August. Stablecoins are virtual assets designed to be pegged to the value of stable assets such as the U.S. dollar or the euro.

He continued, "If issuers such as Tether and Circle purchased $40 billion worth of U.S. Treasuries last year, it is expected to exceed $60 billion this year." He also emphasized, "U.S. Treasury Secretary Scott Besent predicted that stablecoins could generate demand for $2 trillion worth of U.S. Treasuries."

He stressed, "The impact of the stablecoin bill will not be limited to the virtual asset market, but could also affect U.S. Treasuries and the broader financial industry, making it a highly important issue."

He also pointed out that, in Korea, attention should be paid to the period after the presidential election. He said, "This is the first presidential election in Korea where Bitcoin and stablecoins have come to the forefront. If a Bitcoin spot ETF is launched this year or next year, it could emerge as a breakthrough product for the asset management or securities industry."