Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Cryptocurrencies bounce back on hopes for crypto ETFs
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By Lee Min-hyung
By Lee Min-hyung
Cryptocurrencies are bouncing back on growing hopes for the launch of crypto-related exchange-traded funds (ETFs).
Prices of major cryptocurrencies have shown a pattern of correlation with the U.S. stock market, so most digital assets entered a bear market in line with weak performance of key U.S. stock indexes.
But cryptocurrencies took a turn for the better on Tuesday after multiple overseas reports raised the possibility of the arrival of a spot Bitcoin ETF as soon as the end of the year.
According to pricing from CoinGecko, a cryptocurrency data aggregator, the prices of the world's top 10 cryptocurrencies by market capitalization have achieved a meaningful rebound. Bitcoin prices jumped by 4.4 percent at 3:10 p.m. Tuesday from a day earlier, with Ethereum, the second-most valuable cryptocurrency, also rising by more than 4 percent during the same period.
Starting this month, Bitcoin prices slipped and looked to show signs of losing momentum for an additional rally. Bitcoin was traded at around $40,750 (50 million won) during the same time, clearing away a recently escalating fear sentiment over its additional fall to below the $40,000 range once again.
Ethereum, the price of which also moves generally in tandem with that of Bitcoin, also extended a winning streak on Tuesday. Ethereum was traded at $3,044 during the same period.
This was in contrast to the overnight falls of the Nasdaq, S&P 500 and Dow Jones. The recent rally of major cryptocurrencies was driven by the growing optimism for the launch of the Bitcoin ETF by the end of the year, after some U.S. experts raised the possibility through a recent media interview.
“Bitcoin is now an institutional market,” Bitwise Asset Management's Matt Hougan was quoted as saying by CNBC. “It's a market with institutional service providers, institutional investors, a large and robust regulated future market.”
The expert went on to say that the next step is the arrival of a spot Bitcoin ETF. When it becomes a reality, prices of major cryptocurrencies are expected to achieve another quantum jump, as this will help more authorities here and abroad to approve of the launch of cryptocurrency ETFs.
This will also help more capital from institutional investors flow into the cryptocurrency market. According to a recent survey from the Nasdaq, about 72 percent of 500 financial advisers said they would consider investing their clients' assets into cryptocurrencies in case the spot ETF product is available for sale in the U.S.
“Even if it will take more time for Korean authorities to ease regulatory hurdles for the cryptocurrency industry than their U.S. counterparts, any news on the launch of a kind of Bitcoin ETF will bode well for the local industry at a time when the incoming administration expresses willingness for deregulation and future-oriented growth of the industry here,” an industry source said.