A good News … Bitcoin price may see a humongous increase!
But why?
Good question.
As Bitcoin inches closer to $100,000 the cryptocurrency market is seeing an upsurge in activity partly due to recent economic moves in South Korea. In a development that has lifted the hopes of investors, the Bank of Korea announced another consecutive interest rate cut for the second time.
Bitcoin Price Spike
As of November 28, 2024, Bitcoin experienced a rebound in demand. It priced its way back up to approximately $95,538 following an increase of 3.6% over the past 24 hours. With favorable economic conditions on its side, analysts believe this may push BTC to that magic number of $100,000.
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What does Julio Moreno have to say about all this?
Julio Moreno, CryptoQuant’s head of research, pointed out that a potential Thanksgiving rally is in store, and increased demand is critical to push the price of Bitcoin higher.
As has been the case with other investors in hopes of capitalizing on such prevailing market dynamics, Moreno views more and broader expectations concerning its implications. The Bank of Korea cut its key rate to 3% by 25 basis points. This, in turn, is meant to inject fresh capital in the market. It will hence encourage South Korean investors into buying more Bitcoin and other altcoins, further fueling a price rally.
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Economic Impact of Rate Cuts
The rate cuts by the Bank of Korea are targeting a slow economy that has been suffering due to the uncertainties in the global market. The central bank is likely to encourage spending and investing by making borrowing cheaper.
This monetary policy shift has vast implications for the cryptocurrency market too. At lower interest rates, traditional investment avenues will be less attractive compared to cryptocurrencies such as Bitcoin.
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Current Economic Environment:
In addition, the current economic environment has made many small investors in South Korea switch from equities to cryptocurrencies. This is reflected in the Kosdaq Index, which recently plummeted by 8%, while Bitcoin increased by over 35% in a month. According to analysts, most investors are selling their shares to invest in Bitcoin, and this is becoming a trend in digital assets.
Regulatory Concerns
Despite the growing positive momentum in Bitcoin regulatory challenges hang over the South Korean exchanges. One of the leading cryptocurrency exchanges in South Korea Upbit is under investigation in relation to the Know Your Customer breaches.
The Financial Intelligence Unit found more than 500,000 cases of inadequate verification of customers. Such kind of scrutiny can impact the investors’ confidence and trading volume, therefore; it needs to be redressed immediately.
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Final Words
In light of favorable economic conditions, an increase in investor interest for cryptocurrencies and Bitcoin getting close to the $100,000 mark, the scenario appears ready for a strong up move. Interest rate cuts by the Bank of Korea have created an investment-friendly environment and made most South Koreans switch sides to cryptocurrency from the more conventional stocks. However, regulations are required to be crossed cautiously.
(Source: Coingape)
