Will Bitcoin hit 300 million won next year? What is different from the time of the storm three years ago …

While the price of bitcoin, the leading player in virtual assets (cryptocurrency), has recently risen horribly and is approaching all-time highs, concerns and curiosities are growing that the so-called “ Gazua Frenzy ” will disappear in an instant like in the 2017.

On the one hand, there is an analysis that Corona 19’s special situation and stronger (fundamental) underlying physical strength than before will prevent the nightmare of three years ago from recurring if there is no compelling momentum at the rise.

Close to an all-time high … Market capitalization is the Samsung Electronics class

According to CoinMarketCap, a global cryptocurrency market analysis site on the 20th, the price of bitcoin on this day was $ 18,230 (at 2:00 pm). This is similar to the December 2017 record, which is 2.5 times higher in 11 months than this year’s January 1 ($ 7,203).

Considering the Nasdaq’s 30% rise this year, Bitcoin is recording more than 5x the return. Considering that the bitcoin price plummeted to $ 3,000 at the end of 2018, that’s a real blow.

Bithumb, a domestic cryptocurrency exchange, was also trading at 21.14 million won, up 144% year-to-date (8.24 million won), at 2pm the same day. The market capitalization of Bitcoin ($ 32.41 billion 361 trillion won) also increased nearly 2.5 times from the beginning of the year, approaching the market capitalization of Samsung Electronics (386 trillion won).

In the industry, the recent price hike is estimated to be different from 2017, when the speculative nature was strong. At the time, in the “don’t ask for investment” atmosphere, if individual investors both you and I were getting hot, this time it means “reasonable increase”.

Bitcoin value in weakening dollar confidence ↑

When analyzing financial companies and experts, the main ingredients that increase the current price of bitcoin are △ excessive liquidity in the market △ continued weakening of the dollar has changed from the past.

First of all, it’s an analysis that each country’s central banks are competitively releasing money to weather the Corona 19 economic recession as commercial funds are being pushed into the cryptocurrency market. The expectation that the US Biden administration will propose further large-scale stimulus measures after he takes office also fuels the prospect of continuing the cryptocurrency rush. This is definitely a different environment than it was three years ago.

Declining confidence in the dollar, the “doing” of paper money, is also a factor in the price of Bitcoin. Anxiety that the dollar’s position as a key currency is shaken due to large-scale liquidity supply appears to be a strong “ post-state alternative currency ” like bitcoin.

Park Sang-hyun, a researcher at Hi Investment & Securities, said: “The price of bitcoin has a strong tendency to be inversely proportional to the dollar” and diagnosed: “The recent price increase reflects the weakening of confidence in the dollar” . Even in 2017, three years ago, the dollar remained at 103 at the beginning of the year. It was a period of dollar weakness, when the index (which is worth the dollar against major currencies) dropped to 91st level at the end of the year, meaning that if the dollar continues to weaken in the future, the value of bitcoin could increase further.

Unlike in 2017, when governments around the world considered cryptocurrency, it’s also good that the outlook has improved recently. PayPal, the largest online payment company in the world, used by 350 million people worldwide, has announced that it will support payment systems with four types of cryptocurrencies starting next year and, in this case, the cryptocurrency will be used for transactions in real life. Payment company Square has decided to invest $ 50 million, or 1% of its money, in Bitcoin.

SK Securities researcher Han Dae-hoon said, “After Square, PayPal also played a catalytic role in the recent rise in the price of bitcoin.” “Fidelity, an asset management firm, has launched a digital asset service and JP Morgan, a bank of) The movement of global financial companies has also accelerated, as has the provision of banking services to exchanges.”

The news that there were many blockchain and cryptocurrency experts on US President-elect Joe Biden’s business team was also a plus.

“Second boom vs volatility still” tense

If these conditions are maintained, the second bitcoin boom should continue for the time being. In a report for institutional investors on the 17th, Citibank of the United States said: “The bull market will continue until the second half of next year” and “The price of bitcoin could exceed $ 318,000 (about 300 million won) in a year”.

However, price volatility is still large and skepticism is also strained as governments don’t know when they will hit the regulatory limit again. Ray Dalio, who is referred to as a hedge fund loan, said: “Bitcoin is highly volatile for use as a medium of exchange and storage of value as a currency. Even if it grows to the point of threatening existing fiat currencies, the government can make illegal”. .

Heo Gyeongju reporter [email protected]

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