[한대훈] Bitcoin era of 40 million won-JoongAng Ilbo

[출처: 셔터스톡]

[한대훈의 투(자 이야)기] The beginning of the era of 40 million KRW of Bitcoin The asset market has been hot since the beginning of the year. KOSPI finally reached the age of 3000, and Bitcoin also started the era of 40 million won. Again, Professor Doom Rubini’s prospect was wrong. It is a surprising reversal when you think about what was once treated as a tulip bubble. It seems that the stigma of being the second tulip bubble has been removed from the fact that it has renewed its previous high for the third time.

#Uptrend will continue

Signals of asset price bubbles arising from short-term overheating are coming out here and there. In the domestic stock market, a warning sound is also on, with the Buffett index indicating overheating. The same is true of Bitcoin. All assets are passing through speed bumps. However, the speed bumps cannot change direction.

Therefore, we maintain the outlook for the upward trend of the digital asset market price this year. The reason for the rise in bitcoin price was the rise as an alternative to the decline in the value of money and institutional investors’ participation in the market. As the background has not changed, the upward trend is expected to continue. First of all, it has been suggested that the Fed and other central banks will continue to supply liquidity next year. The Fed presented its position at the FOMC in December that there will be no tightening until 2023. With the explosive liquidity supply, the assets supplied by the Big 4 Central Bank are approaching $30 trillion. Concerns over austerity have recently increased, but Fed Chairman Powell recently said that there is no review of austerity right now. In addition, it showed appeasing market participants, saying that if they are tightened, they will communicate sufficiently with the market. The M2 growth rate also exceeded 26%, the highest level ever. In other words, it is an environment in which the depreciation of money can continue. Naturally, the charm of bitcoin as an alternative to the depreciation of currency is expected to emerge once again.

Institutional investors continue to enter the market. One of the reasons why institutional investors have been unable to participate in the market has been the protection and management of assets. To solve this problem, financial institutions including Fidelity have started a custodial service, and KB Bank and Shinhan Bank are planning to launch consignment services in Korea. Driving this momentum, VanEck once again applied for a Bitcoin ETF. Even if it is canceled this time, I don’t think the listing of the Bitcoin ETF will be long. I have experienced a rise in gold prices as gold ETFs were listed in 2004. If the Bitcoin ETF is listed, it is positive in terms of inflow of funds.

#Price is also important, but we shouldn’t miss it

Of course, price is the best marketing tool, and it is the most important for investors. However, we need to watch together how the industry is changing.

The US Currency Supervisory Service (OCC) has recognized stablecoins as a formal payment method. Banks in the United States can now directly issue stablecoins, which can be used for payment. This is a very important change. Until now, payments between banks have only been made on the SWIFT network, but now transactions between financial institutions are possible through blockchain technology. It can also be interpreted as a sign that the US, which had been skeptical about the CBDC (Central Bank Digital Currency), has changed. It is expected that the digitization of the dollar will be triggered through digital currency issued by private banks rather than the CBDC developed by the central bank. It is also necessary to pay attention to the competition for hegemony over digital currency in China, led by state-led and US led by private banks.

It is also worth watching the news of Ethereum’s futures launch. The US CME (Chicago Merchandise Exchange) announced a plan to launch Ethereum futures in February this year, which is the second among digital assets following the launch of the Bitcoin futures product in 2017. It is a historic moment when Ethereum is also incorporated as an investment product following Bitcoin. If Ethereum is successfully settled following Bitcoin, the way you view digital assets will change. And it is an opportunity to expand the influence of digital assets as a new product line.

Finally, there is a dramatic change in the position of financial companies. Compared to the last bitcoin craze in 2017, it’s a world-class level. Now, banks are struggling to enter the consignment service market, and hedge funds are incorporating Bitcoin from a portfolio perspective. They think that the current price is also the price, but they are paying more attention to the charm of Bitcoin in the future. Bitcoin, which is already positioned as digital gold with millennials at the center, is expected to generate greater demand as millennials grow as the main axis of society. It is very attractive to financial companies suffering from deteriorating profitability. When the Bitcoin ETF is launched and related products continue to be released, of course, bigger profits are expected. In other words, it is a food for the new future. The same is true in terms of portfolio. Bitcoin has an inverse correlation close to -1 with the US dollar. With the inauguration of the Biden administration, enormous fiscal policies are scheduled to be implemented. The pressure to weaken the dollar is bound to increase. In this respect, Bitcoin is an attractive hedge against a weak dollar. In addition, high returns are expected due to high expectations for an uptrend due to expectations for institutional inflow.

In other words, it is true that the warmth is spreading to related industries and markets due to the rising bitcoin price, but we need to pay attention not only to the price, but also to new changes that are proceeding quietly. Right now, you’ll be interested in the price of 1 Bitcoin or 1 Ethereum, but this new change will have a bigger impact in the end. The digital asset market, which broke through the third peak amid various criticisms and hardships, and is now facing a new electric point, is now about to pay attention to the new market and the changes that affect its incorporation as a new asset class. .

Dae-Hoon Han, Analyst of SK Securities, Author of 『Next Finance』