A researcher from South Korea’s Korbit crypto exchange, Kim Min-seung, who heads their Research Center, asserts that stock trading in the US holds considerable power over Bitcoin‘s price fluctuations.
Min-seung pointed out that various elements are currently driving the fluctuations in the Bitcoin market instead of just a few standard macro factors that previously influenced its price swings. These factors encompass both cryptocurrency and non-cryptocurrency elements. Examples include mining operations, government regulations, conflicts, inflation rates, and major financiers.
ETF Leading Traditional Stock Market Influence on Bitcoin Price
A researcher observes that the SEC’s approval of Bitcoin spot ETFs in the US has brought about a fresh market situation. In this scenario, Bitcoin responds to stock market traders’ actions. Reportedly, analysts have determined that Bitcoin’s price is influenced by occurrences in the Bitcoins spot market.
Min-seung highlights that the influence of automated trading has grown significantly, causing bots to mimic stock market movements. These bots, primarily based in Asia and certain regions, are buying and selling Bitcoin based on trends observed in stock and ETF transactions.
For several months now, Bitcoin’s price pattern has aligned with the US stock market’s trading hours – it tends to rise or fall during those times. Remarkably, similar trends have emerged during Asian market hours as well. It appears that the approval of a Bitcoin spot ETF is the driving force behind this correlation.
Min-seung adds that experts have observed a matching trend in futures trading, resulting in the cancellation of both short and long contracts. However, he anticipates an influx of more institutional investors entering the market, potentially amplifying the connection between Bitcoin’s price fluctuations and traditional ETF markets.
New South Korean Exchange Rules
In South Korea, the Bitcoin market is dominated by individual investors rather than corporations. Institutions are showing interest but have yet to be granted legal entry. The country’s financial regulators have been cracking down on centralized cryptocurrency exchanges (CEXs) and plan to implement strict regulations on their activities starting next month.
Crypto exchanges operating in South Korea need to steer clear of listing tokens linked to past exploited projects, with the exception being those that have undergone a comprehensive investigation and put in place effective security measures. Furthermore, foreign exponents aiming to cater to the South Korean market are obliged to release whitepapers or manuals specifically tailored for local citizens.
South Korean regulators can now require cryptocurrency exchanges to remove listings of tokens if their issuers refuse to supply complete information or fail to meet other disclosure standards. Such action may be initiated as well when there are discrepancies between reported and actual token issue or circulation amounts.
At present, the price of Bitcoin is $70,866, having increased by almost 7% over the past week and an additional 2% in just the previous 24 hours.
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2024-04-11 12:49