Bitcoin's Downward Trend Reverses... Will It Surpass 140 Million Won Again?

Impact of Trump's Pressure for Rate Cuts

Recently Recovered to 130 Million Won

Attention to Gold Price Rise and Coupling Phenomenon

Rebound Observed Due to Weak Dollar

Continued Tariff Policy Acts as a Burden

The price of Bitcoin, which had been on a downward trend since February, is showing signs of rebounding.

Due to the tariff war triggered by U.S. President Donald Trump, it had fallen to the 110 million won level, but recently recovered to the 130 million won level. Analysts say that Bitcoin prices are rising as President Trump pressures the U.S. Federal Reserve (Fed) to lower interest rates. It is also gaining attention for rising alongside gold, a representative safe asset, amid significant fluctuations in the financial market. There is interest in whether it can surpass the 140 million won level, which it briefly reached in early March during a temporary surge.

◇ Reclaiming the 130 Million Won Level

According to the domestic cryptocurrency exchange Upbit, Bitcoin has risen by about 9% over the past month. It jumped about 6% on the 23rd of last month alone, surpassing 130 million won for the first time in a month and a half, and has continued to maintain the 130 million won level. In the global market, it is trading in the 90,000 dollar range. Large investors' purchases have become more active than before.

According to the on-chain analysis platform Glassnode, the accumulation indicator for large investors holding more than 10,000 Bitcoins exceeded 0.9 on the 24th of last month. If this indicator exceeds 0.5, it is considered that the buying trend is strong.

After the U.S. presidential election last November, Bitcoin prices, which had soared without hesitation, began to decline on January 29, the tenth day of President Trump's inauguration. President Trump, who claimed to be a pro-cryptocurrency advocate, focused on the tariff war rather than favorable policies, which dampened investor sentiment. At the end of February, President Trump threatened to impose a 25% tariff on Canada and Mexico if the issue of synthetic drugs like fentanyl entering the U.S. was not resolved. He had already imposed a 10% tariff on China, and expressed his intention to impose an additional 10% and a 25% tariff on the European Union (EU). He actually announced reciprocal tariffs to countries around the world in early April, excluding only China from the '90-day grace' measure, and raised the additional tariff rate to 145%. China responded by imposing a 125% retaliatory tariff on U.S. products.

If the U.S. imposes more tariffs on trading partners, it can increase inflation within the U.S. This results in the Fed delaying interest rate cuts. If interest rate cuts are delayed, there is a stronger tendency to prefer safe assets like gold or the dollar over risky assets like Bitcoin.

However, as expectations for interest rate cuts have recently been reestablished, Bitcoin prices have rebounded. On the 23rd of last month, President Trump said to the Fed, "I hope you actively pursue interest rate cuts," and "Now is the perfect time to lower rates."

The official appointment of Paul Atkins, known as a cryptocurrency advocate, as chairman of the U.S. Securities and Exchange Commission (SEC) on the 21st of last month is also evaluated to have had a positive impact on Bitcoin prices. Chairman Atkins, who has experience working in the fintech industry, expressed his intention to review existing regulations at the SEC's first cryptocurrency roundtable recently. He said, "The existing regulatory framework needs serious scrutiny," and "We want to move from an adversarial regulatory approach to a new cooperative regulatory direction." It is evaluated that he made it clear that he is on a different path from the Joe Biden administration, which focused on regulation and punishment.

◇ The Burden of the U.S. 'Tariff Bomb' Remains

Some are paying attention to the fact that this Bitcoin rebound shows a coupling phenomenon with gold prices. Until now, Bitcoin prices have moved inversely to gold prices, but since the 21st of last month, they have been rising together. This has increased interest in whether Bitcoin is showing the characteristics of a safe asset. Bloomberg reported, "After President Trump announced plans for large-scale tariffs, the prices of risky assets showed a downward trend," and "Meanwhile, Bitcoin started to show a similar trend to gold, which stands out in uncertain markets."

There are also observations that this rebound will continue due to the recent weak dollar. The dollar index, which represents the value of the dollar against the currencies of six major countries, fell to 99.01 on the 28th of last month, recording the lowest level in about three years. If this indicator is below 100, it means the dollar value has fallen.

According to Yahoo Finance, Arthur Hayes, co-founder of the cryptocurrency exchange BitMEX, said, "The Bitcoin bull market has returned," and "It will benefit from the Fed's monetary policy and the weak dollar."

However, the fact that President Trump still supports a strong tariff policy is considered a variable. On the 27th of last month, President Trump posted on his social media platform Truth Social, "If tariffs are imposed, many people's income taxes can be significantly reduced or completely exempted." He also mentioned, "A large number of jobs have already been created and new factories are either under construction or in the planning stages," and "We plan to launch an external income agency to collect tariffs." This is in contrast to his statement just five days earlier to China, "If negotiations are made, the tariff rate will be significantly reduced."

Reporter Jinseong Kim jskim1028@hankyung.com