A representation of Bitcoin / Korea Times photo by Shim Hyun-chul
Lack of US policy details, Fed’s hawkish stance weigh on virtual asset’s growth
By Lee Yeon-woo
Bitcoin has been trending sluggishly since surpassing $100,000 in December as it struggles to find a clear catalyst for growth and has remained range-bound, particularly after the U.S. Federal Reserve (Fed) signaled it won’t accelerate interest rate cuts, industry experts said Tuesday.
According to market tracker CoinMarketCap, Bitcoin was trading at around $96,000 on Tuesday. While it exceeded $98,000 on Saturday, it hovered around the $97,000 level over the weekend and dipped into the $96,000 range.
The sluggish performance has also dampened the appeal of the leading cryptocurrency.
The total trading volume on Upbit, Korea’s largest virtual asset exchange, stood at 3 trillion won ($2 billion) on Tuesday, down about 70 percent from Jan. 17, when anticipation for Trump’s second term was high. Moreover, altcoin transactions accounted for about 97 percent of the total trading volume, indicating a shift in investor focus.
Experts said the gains driven by previous market expectations are now undergoing a correction.
“Bitcoin’s recent sideways movement reflects the market’s reassessment of its initial optimism following the U.S. election. Investors are now scrutinizing whether those promises will materialize and how quickly they will be implemented,” NH Investment & Securities analyst Hong Song-uk said.
Trump made bold promises during his presidential campaign, declaring himself a “crypto president.”
They include designating Bitcoin as a national strategic reserve asset and eliminating regulations in the crypto sector to maintain a leading position in the market.
“Early investors are now in a phase of profit-taking, contributing to the market’s current consolidation,” Kim Kab-lae, a senior research fellow at Korea Capital Market Institute, said. “The process of institutionalization and regulatory implementation often takes longer than the market expects. This disconnect between anticipation and reality creates a time lag, contributing to market fluctuations.”
In addition to the absence of concrete policy details from Trump, macroeconomic conditions pose a major barrier to Bitcoin’s price growth.
Fed Chair Jerome Powell reaffirmed on Feb. 11 that there is no urgency to cut interest rates, citing the U.S. economy’s continued strong growth and inflation remaining above the 2 percent target. Typically, interest rate cuts boost investor sentiment toward risky assets, which in turn drives Bitcoin prices higher.
Markus Thielen, founder of 10x Research, said Bitcoin will undergo a period of consolidation until mid-March or early May.
“This outlook has been reinforced by stronger-than-expected U.S. employment data and rising bond yields. Additionally, part of the Fed’s inflation expectations are tied to the belief that potential tariffs under the Trump administration could lead to higher inflation,” Thielen said.
Since taking office, Trump has shaken the market with unprecedented tariff measures, prompting capital to shift toward safe-haven assets like gold, pushing its price to a record high. While Trump has deferred tariffs on Mexico and Canada, trade tensions between China and the U.S. continue to escalate, further diminishing Bitcoin’s appeal.
However, in the long term, analysts believe positive momentum will outweigh concerns.
On Jan. 23, Trump signed an executive order establishing a digital asset task force, which is set to submit a report on cryptocurrency legislation within six months. The U.S. Securities and Exchange Commission also launched a crypto task force on Jan. 21, aligning its policy direction with the broad regulatory framework for digital assets. Such moves draw significant attention to whether Bitcoin will be classified as a strategic digital reserve asset, as promised by Trump.
“The Trump administration’s stance remains clear, and it has been about a month since he took office. Given this short timeframe, it’s difficult to interpret Bitcoin’s current movement as a significant downturn or the start of a bearish trend,” Hong said.
Experts said the current trend highlights that investing in virtual assets with a short-term mindset and reacting emotionally to price fluctuations is not a sound strategy.
“Looking ahead, investment activity will likely continue to be driven by those with expertise, high information accessibility and substantial financial resources — individuals who have the capacity to absorb risks,” Kim said. “It is advisable for individual investors to spread investments over time, especially in assets like Bitcoin, to mitigate risks effectively.”
