Risk-on sentiment grows… Bitcoin hits 160 million won again

"US to lower policy rate this month"

Circle, Bitmain and other crypto stocks also surge

Bitcoin's price re-entered the 160 million won level on the 19th. Analysts say the rally was driven by growing expectations that the U.S. central bank (the Fed) will cut policy rates soon amid concerns about stagflation (rising prices amid economic stagnation).

According to domestic cryptocurrency exchange Upbit, Bitcoin's price exceeded 160 million won at around 7:20 a.m. that day. Around 9:40 a.m., it was trading at about 161.5 million won. Overseas, it is trading in the $115,000 range.

Bitcoin's price fell to the 149 million won range on the 1st but has since rebounded on hopes for rate cuts. The U.S. Department of Labor said that initial jobless claims last week (Aug. 31–Sept. 6) were 263,000, an increase of 27,000 from a week earlier. It also announced that the August consumer price index (CPI) rose 0.4% month-on-month. That is 0.2% percentage points higher than July's 0.2% increase. Such changes have amplified stagflation concerns and strengthened views in financial markets that the Fed will lower the policy rate this month. Some even foresee a "big cut" (a 0.5% percentage-point reduction in the policy rate).

Buoyed by greater risk-on sentiment from expectations of rate cuts, the three major New York stock indices—the Dow Jones Industrial Average, the S&P 500 and the Nasdaq—all hit record highs that day. Crypto stocks, which had recently stalled, also showed broad strength. Circle, the issuer of USD Coin, the world's second-largest stablecoin, saw its stock surge 17.6% in a single day. Bitmain, the world's largest holder of Ethereum, also rose 4.8%.

Reporter Jinseong Kim jskim1028@hankyung.com