March 1, 2024
SEOUL – The price of bitcoin traded in Korea climbed to its highest ever Thursday, fueled by a global rally initiated from spot exchange-traded funds and an impending halving.
Bitcoin, the world’s biggest cryptocurrency, traded in Korea at up to 90 million won ($67,490) on the country’s largest crypto exchange, Upbit, at 3:47 p.m.
On the previous day, it broke its previous high of 82.7 million won at around 6 p.m. for the first time since November 2021.
After peaking at 90 million won, bitcoin’s price slightly moved down to 88.93 million won on Upbit as of 4:30 p.m. but traded at 88.44 million won on another local crypto exchange, Bithumb.
This was more than 50 percent higher compared to when it traded at around 57 million won in the Korean market earlier this year.
Yet on the global market, bitcoin has yet to reach its previous high. Bitcoin is usually traded at a higher price in Korea than the world average due to strong local demand.
According to the US-based crypto exchange Coinbase, bitcoin was traded at $62,753 at 4:30 p.m., nearly 10 percent lower than the previous record set at $68,789 in November 2021.
The rapid ascent of bitcoin is assessed to have stemmed from a strong inflow of spot bitcoin ETFs, after the US Securities and Exchange Commission’s approval which came last month.
Asset managers operating related ETFs have to directly hold the cryptocurrency to run the funds, leading to a rise in its overall transaction volume and price.
Another reason behind the bull’s run is the expectation that the “halving” event — when bitcoin reduces the number of new coins earned by miners — is near. The drop of new bitcoins into circulation makes the crypto asset more attractive.
“As it has not been long since the spot ETF products were launched, the inflow of funds could surpass that of market expectations,” analyst Hong Song-uk from NH Investment & Securities said.
Hong further projected that the uncertainties in US politics could strengthen the value of bitcoin, citing the conflicts at the US Congress and the upcoming US presidential election.
“The noises associated with the US government’s finance and credibility could highlight the value of bitcoin,” he said.