Bitcoin on fire, $60,000 right in front of… Should I go to ‘100,000 dollars each’?

Investment ignited again. The stimulus plan for the US relief plan worth 1.9 trillion dollars (about 2150 trillion won) was set on fire. It’s about Bitcoin.

Bitcoin’s move this week was unstoppable. According to the cryptocurrency site CoinDesk, the value of bitcoins remained at $46,588 each on the last 5 days.

The movement changed from the 7th. On that day, it exceeded 50,000 dollars, and on the 9th, it exceeded 52,000 dollars. On the 11th, it exceeded 56,000 dollars, and on the morning of the 12th, it rose to 58,141 dollars. It broke the record high ($58,012), which was recorded on the 22nd of last month.

Why did the flow change on the 7th? This is because the US relief plan economic stimulus bill passed the US Senate on the 6th (local time) and crossed the 9th ridge of enforcement. The US Senate seats are divided into 50-50 by Democrats and Republicans. One Republican legislator was unable to vote, and was finally passed with 50 in favor and 49 in opposition. The bill passed the Senate was expedited. It was finally passed in the House of Representatives on the 10th, and the proceedings in Congress were ended. President Joe Biden fueled investment sentiment by signing the stimulus bill on the 11th, one day earlier than expected. “Biden’s signature reinforced financial market optimism about Bitcoin,” Bloomberg said.

Market experts predict that massive fiscal spending will be a boon for Bitcoin. On the 6th, CoinDesk said, “Large fiscal expenditures such as the economic stimulus plan cause inflation, which is a good sign for a value store such as Bitcoin.” “Bitcoin can be an effective hedging tool,” said George Ball, chairman of asset management firm Sanders Morris Harris, in an interview with Yahoo Finance.

Disaster subsidies of up to $1,400 per person (approximately 1.58 million won), the core of the support plan, are also attracting attention. This is because of the expectation that some of the subsidies could flow into the cryptocurrency market. Dae-hoon Han, a researcher at SK Securities, said, “Even in March last year, when cash of 600 dollars per person was paid in the United States, investments were made in bitcoin and technology stocks, but more than twice as much cash is paid. Can lead.”

The waning of government bond yield fears also had an impact. The bidding for US Treasury bonds, including 10-year bonds, was successful on the 9th and 11th, contrary to market concerns. It is interpreted that the investment sentiment for risky assets such as bitcoin has strengthened as the government bond interest rate stabilized.

The interest of companies and investment institutions is also continuing. On the 5th, Chinese beauty app company Meitwo bought 40 million dollars worth of cryptocurrencies such as Bitcoin and Ethereum on the 5th. Investment bank Goldman Sachs has established a cryptocurrency investment desk and is considering launching a Bitcoin ETF. Dan Rob, CEO of Third Point, a US asset management company, recently suggested that he is investing in bitcoin, saying he is “deeply immersed in crypto assets.” Thirdpoint’s assets under management are estimated to be between 15 billion and 20 billion dollars (about 17 to 23 trillion won). On the 10th, Jack Doshi, CEO of Twitter, a leading bitcoin supporter, announced that he would donate the proceeds of his first tweet auction in bitcoin.

In this atmosphere, the “$100,000 per Bitcoin price”, which was considered absurd, is also gaining strength. Earlier this year, JP Morgan, an investment bank in the US, said, “As bitcoin can be a value storage tool to replace gold, the price can rise to $146,000 (about 160 million won).” Mike Novogratz, CEO of Galaxy Digital Holdings, also told Bloomberg, “Because the market is overflowing with liquidity, it is not surprising if Bitcoin exceeds $100,000 within this year.”

Nevertheless, concerns about Bitcoin are still daunting. Bloomberg said, “There is a skepticism that bitcoin is a bubble that will disappear in an instant,” he said. “Especially, the negative evaluation of financial authorities in each country is great.” US Treasury Secretary Janet Yellen and European Central Bank (ECB) governor Christine Lagard continue to post that “we need to regulate highly speculative bitcoin” and “bitcoin is not a real currency.

Treasury yields are also unsafe. A significant portion of the financial stimulus plan must be financed by issuing government bonds. If a lot of bonds are released, the interest rate can rise (the price of bonds decreases). When fears of rising government bond yields sweep over the stock market, cryptocurrency prices will also face downward pressure. Edward Moya, senior market analyst at Oanda, a US foreign exchange brokerage, predicted, “If the stock market shows a correction, Bitcoin will inevitably become vulnerable.”

Reporter Seungho Lee [email protected]