'Good news appeared, so why is it like this'…Aimed for a Bitcoin jackpot, 'tears'

Bitcoin sidelined despite U.S. rate cut…What is the outlook for next year?

Ahead of the year-end, Bitcoin prices have failed to escape weakness. Many market participants had expected Bitcoin prices to rebound if the U.S. central bank (Fed) lowered its policy rate, but Bitcoin has remained sideways even after the rate cut this month. Major institutions are revising their rosy forecasts downward. In the market, bulls and bears are evenly matched over the direction of Bitcoin prices next year.

○ Bitcoin's weakness continues

According to domestic cryptocurrency exchange Upbit on the 13th, Bitcoin traded at 137,170,000 won at 4 p.m. on the 12th. Compared with its all-time high recorded at 9 a.m. on October 8 (178,010,000 won), it has fallen by more than 20%. Recently, Bitcoin is trading at prices even lower than on January 1 this year (141,320,000 won).

One reason cited for Bitcoin's sharp fall in the fourth quarter is market concerns over liquidity shortages. The U.S. federal government was 'shut down' for a record 43 days from October 1 due to budget conflicts between President Donald Trump and the Democratic Party, preventing liquidity from being supplied. Added to this were concerns over the Fed's hawkish monetary policy, and Bitcoin prices even fell to 125,600,000 won on the 22nd of last month.

Market participants expected that a Fed rate cut would relieve liquidity concerns and allow Bitcoin prices to rebound. However, Bitcoin did not rebound even after the Fed's Federal Open Market Committee (FOMC) held a meeting and cut the policy rate by 0.2% point to an annual 3.5~3.75% on the 10th (136,700,000 won).

A reason cited for Bitcoin's continued weakness despite the positive of a U.S. rate cut is that the Fed carried out a 'hawkish (preference for monetary tightening) cut.' In the FOMC statement, the Fed said it would "review the range and timing of any further policy rate adjustments," indicating an intention to keep rates unchanged as of January next year. The Fed officials' rate projections shown as a 'dot plot' also presented a median policy rate of 3.4% next year, suggesting the number of U.S. rate cuts next year might be limited to one.

○ Will Bitcoin rebound again?

Financial firms are revising the previously touted rosy forecasts one after another. Standard Chartered (SC) Group, in a report released on the 9th, cut its year-end Bitcoin forecast from $200,000 to $100,000 and revised next year's target from $300,000 to $150,000. Cathie Wood, CEO of Ark Invest, also lowered her 2030 Bitcoin price forecast from $1,500,000 last month to $1,200,000.

Opinions among market participants diverge on Bitcoin's outlook after next year. Some predict continued weakness according to the 'four-year cycle theory' that Bitcoin plunges every four years tied to the halving cycle, while others expect a rebound supported by liquidity. Kim Min-seung, head of the Korbit Research Center, said, "In the past, halving-centered 'seasonality' determined the cycle rhythm of Bitcoin prices, but this time the liquidity cycle is functioning as the main variable," and added, "If a rally in asset markets resumes after tightening ends in the first half of next year, there is a possibility that Bitcoin will seek a new high above the levels seen in November."

Jeong Ui-jin, reporter