In a large shopping mall in New Jersey, USA, there is a machine that allows you to buy bitcoin. New Jersey = Correspondent Jo Jae-gil
The price of cryptocurrency (virtual currency) is showing a sharp decline in exchanges in major countries such as the United States. The price of risky assets is also falling along with the decline in stock prices.
On the 20th (local time) at 11 am (local time), the largest cryptocurrency exchange in the US, Coinbase, is trading at a price of 43,800 dollars per piece. At 9:35 a.m. that day, it also dropped below $43,000 per piece. Compared to 24 hours ago, the figure has plummeted by about 10%.
The same goes for the second-largest price by market cap. At one point on that day, it fell more than 10%, breaking the $3,000 mark per piece. It is currently trading in the low-$3,000 range.
The reason why cryptocurrency prices fell one after another is that major indices such as the Dow and S&P 500 are showing sharp declines.
Risk aversion sentiment has risen amid growing concerns about tapering ahead of the Federal Open Market Committee (FOMC) regular meeting of the US central bank (Fed) on the 21st and 22nd. The growing possibility of bankruptcy of China’s Hengda Group (Evergrand), which is called the ‘Chinese version of Lehman Brothers’, is also acting as a bad news for the global asset market. Hengda Group’s debt is more than 350 trillion won in Korean won.
In addition, there are still concerns that the governments of major countries such as the United States will tighten regulations on cryptocurrencies.
Leah Wald, CEO of Valkyrie Investments, an investment company, said, “As the stock market plummeted, demand for margin payment (margin call) for loss of principal was pouring in, and to cover this, more risky assets (cryptocurrency) are being sold.” “Until the market calms down, the same pattern could be repeated,” he said.
El Salvador’s President, Nayb Bukele, said on Twitter that he had “purchased 150 more bitcoins.” El Salvador bought a total of 700 bitcoins. President Bukele recently started using Bitcoin as a fiat currency and has been gradually increasing the amount of Bitcoin purchases.
New York = Correspondent Jo Jae-gil road@hankyung.com
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