Due to concerns over the 'tariff war' initiated by the United States, the virtual asset market is fluctuating between heaven and hell. The price of Bitcoin plummeted to $91,000 after U.S. President Donald Trump signed an executive order imposing tariffs on Canada, Mexico, and China. However, news that the tariffs would be suspended led it to rebound to $100,000 just a day later. In this process, hundreds of thousands of people recorded losses exceeding 3 trillion won, and investor sentiment was dampened.
Because of this volatility, there is growing pessimism that Bitcoin cannot become 'digital gold' to defend against inflation. On the other hand, analyses suggest that the pro-virtual asset stance of Trump's second administration remains unchanged, making it difficult to view this as the beginning of a bear market.
According to the global virtual asset tracking site CoinMarketCap, as of 1 p.m. on the 4th, the price of Bitcoin recorded $100,738, up 7.2% from 24 hours prior. The price of Ethereum also rose 10.5% in a day to about $2,808. Additionally, Ripple increased by 19.9%, Solana by 8%, and Binance Coin (BNB) by 7.9%. The virtual asset prices, which had plummeted after President Trump decided to suspend tariffs on Mexico, rebounded.
In just a few days, numerous investors suffered losses due to the rapid fluctuations. According to the cryptocurrency data analysis firm Coinglass, on the previous day, 742,778 individuals were liquidated in the derivatives market, experiencing the largest liquidation in the history of virtual assets at $2.26 billion (3.31 trillion won) within 24 hours. The liquidation of 'long positions' betting that the prices of virtual assets would rise reached $1.89 billion (2.77 trillion won). In the derivatives market, losses occur when prices move contrary to expectations, and if a certain level of margin cannot be met, forced liquidation ensues.
As a result, pessimism regarding Bitcoin is emerging. It is argued that it has limitations in becoming 'digital gold,' as it tends to move in tandem with risk assets like stocks. Bitcoin has long since transformed from a means of payment to an investment target, and recently, following President Trump's remark about considering Bitcoin as a 'strategic reserve asset,' it has even eyed the status of gold, which is seen as a hedge against inflation.
Jung Min-kyo, an analyst at Prestory Research, noted, 'While there are discussions that Bitcoin serves as both digital gold and a hedge against inflation, it should still be regarded as a risk asset that moves like stocks.'
The market remains optimistic. It is argued that the pro-virtual asset actions of Trump's second administration, which have driven the recent uptrend, are still valid. This suggests that a phenomenon where prices rise after a short-term adjustment could be repeated again.
Another basis for this optimism is Trump's first administration. President Trump previously imposed tariffs on several countries, triggering a trade war. He was particularly hostile, going as far as to criticize Bitcoin as a scam in media interviews. However, the price of Bitcoin fluctuated during the four years of Trump's first administration, surging to an all-time high of $28,000.
According to Investing.com, at the beginning of Trump's first administration in January 2017, the price of Bitcoin was only $996, but within a year, it surpassed $13,000. While it plummeted to $3,400 in 2018 when the tariff war with China intensified, it rebounded again to over $20,000 in 2020.
Choi Seung-ho, a member of the Research Institute, said, 'Although investor sentiment is being dampened by fears of inflation due to the tariff war, it would be premature to assert that a full-blown bear market has begun,' adding that 'the timing of market stabilization will serve as a crucial turning point.'