Bitcoin and gold also tumble… 'everything rally' abruptly halted

Korea Economic Daily

Summary

It reported that major asset prices, including Bitcoin and gold, recently fell together.
Experts said that risk-off sentiment and a stronger dollar were the background for the declines in major assets.
It reported that a prolonged U.S. shutdown could negatively affect year-end asset price gains.

Bitcoin breaks below $100,000 for the first time in four months

Risk-off sentiment grows, causing simultaneous declines

Concerns that the artificial intelligence (AI) industry is overvalued have amplified risk-off sentiment, leading to avoidance of risky assets and causing prices to plunge not only for cryptocurrencies but also for gold, a representative safe-haven asset. Analysts say this has put the brakes on the "everything rally," in which major asset prices rise together.

According to CoinMarketCap on the 5th, Bitcoin's price fell to the $99,000 range at around 10:40 a.m. It is the first time Bitcoin has dropped below $100,000 since June 23, about four months ago. Bitcoin later rebounded somewhat, recovering to around $101,700 by 3 p.m. Other major cryptocurrencies such as Ethereum, XRP, and Solana also fell more than 10% at one point in the morning (compared with 24 hours earlier).

Gold, which had been on a high run, has also slipped below $4,000 per troy ounce. According to the New York Mercantile Exchange, gold futures were trading at about $3,930 per troy ounce at around 9:30 a.m. After plunging to $3,937 at around 11:30 p.m. on the 4th, they have been fluctuating in the $3,900 range.

Experts point to not only risk-off sentiment but also a stronger dollar as the background for the simultaneous declines in major assets, including gold. With the U.S. central bank (Fed) showing caution about cutting the benchmark interest rate and the U.S. federal government's shutdown dragging on, the atmosphere is fueling dollar strength. There are also concerns that spending from the U.S. Treasury's general account (TGA) has effectively stopped, which could squeeze short-term liquidity in global financial markets. Sanghyun Park, an analyst at iM Securities, said, "If the shutdown that has fueled dollar strength continues through the Thanksgiving holiday (November 27–30), it will be difficult to expect asset price gains by year-end."

Jinseong Kim jskim1028@hankyung.com