US Bonds, Dollar, and Stocks 'All in Danger'... Funds with No Place to Go Flee to Bitcoin

Bitcoin Surpasses $110,000

Hits New High in 4 Months

'Decentralized' Appeal Amid US Government Risk

Traditional Asset Prices Plunge... Rising Alone

Stablecoin Law Passed by Congress Also a Boon

Potential Role as Key Currency in Payments and Exchanges

"Trust in Bitcoin Increases in the Market"

Investment Firms and Institutions Rush to Buy

"Uptrend Until Summer... Could Reach $200,000"

Bitcoin has surpassed $110,000 for the first time ever, setting a new all-time high in four months. Amid the 'Treasury Shock' in the US, where even safe assets like bonds and dollars, as well as risky assets like stocks, are shaking, Bitcoin is emerging as a refuge for funds with no place to go. Additionally, as the US Congress passes laws related to stablecoins and the Trump administration pushes pro-virtual asset policies, the price rise is gaining more momentum.

◇ Less Sensitive to Macro Risks

According to CoinMarketCap on the 22nd, Bitcoin surpassed $110,000 around 8:30 AM. Three and a half hours later, at noon, it rose to $111,861. This surpassed the previous all-time high of $109,114 recorded on January 20th, in just four months. Domestically, it traded at 155,323,000 won, the highest since February 5th, but did not surpass the all-time high of 163,325,000 won recorded on January 20th, due to the won-dollar exchange rate falling (stronger won).

Bitcoin's strong performance is attributed to President Trump's push for a large-scale tax cut, raising concerns about the expansion of the US fiscal deficit. While the bond and dollar markets, based on US government credit, and the closely related stock market were hit, the decentralized asset Bitcoin rose alone. Generally, bonds and currencies lose value as fiscal deficits expand and political uncertainty increases. Risky assets like stocks cannot escape such government risks either.

Bitcoin is considered less sensitive to macro risks like national fiscal deterioration and debt increase because it is not controlled by any specific government or central bank. Moreover, the US government can issue unlimited bonds if needed. Bitcoin's supply is fixed at 21 million. Kim Min-seung, head of research at Korbit, said, "Bitcoin is generally considered to have originated from the awareness of issues with centralized financial systems after the 2008 global financial crisis," adding, "Bitcoin's appeal is being highlighted again in times like now when trust in the US government is shaking."

◇ Professional Investment Firms Also Emerging

The acceleration of pro-virtual asset policies in the US is also cited as a factor driving up Bitcoin prices. The US Senate passed a stablecoin bill on the 19th, which strengthens issuance and collateral requirements and mandates compliance with anti-money laundering laws. Stablecoins are cryptocurrencies that fix their value 1:1 to specific assets like the US dollar. The bill requires stablecoin issuers to hold 100% reserves in assets like US dollars and short-term government bonds. Stablecoins act as a kind of key currency in the cryptocurrency ecosystem for payments, exchanges, and asset transfers. As the largest capital market in the world, the recognition of stablecoins in the US is raising expectations that trust in Bitcoin, the representative asset of cryptocurrencies, will increase.

In the US, companies mimicking the Bitcoin investment firm Strategy are being established one after another, increasing demand for Bitcoin. Strategy holds a total of 576,230 Bitcoins, with an average purchase price of about $66,384. The recent rise in Bitcoin prices has resulted in an estimated profit of $383 (about 53 trillion won). Indirect investments by government agencies, which currently cannot invest in Bitcoin, are also increasing by purchasing Strategy stocks. Companies aiming to be the second Strategy have also emerged. Financial investment firm Cantor Fitzgerald established TwentyOne last month, focusing on Bitcoin investment with stablecoin issuer Tether and investment company SoftBank Group. TwentyOne began full-scale operations by purchasing 42,000 Bitcoins (worth about 5.4 trillion won) right after its establishment.

Global investment bank (IB) JP Morgan announced on the 19th that it would allow its clients to purchase Bitcoin. Jeff Kendrick, head of digital asset research at Standard Chartered (SC), said, "As institutional investors' interest grows, Bitcoin will continue its upward trend until summer," predicting that "it will reach $120,000 in the second quarter and $200,000 by the end of the year."

Reported by Jo Mi-hyun/Kim Jin-sung mwise@hankyung.com