Key Points
- US stock traders are significantly impacting Bitcoin prices, according to a South Korean researcher.
- South Korea is looking to impose stricter regulations on its cryptocurrency exchanges.
A researcher from South Korea has claimed that Bitcoin prices are being heavily influenced by stock traders in the United States. Kim Min-seung, who leads the Research Center at Korbit crypto exchange, suggests that the traditional market is having a substantial impact on Bitcoin.
Kim Min-seung has indicated that a variety of factors currently affect the Bitcoin market. The Bitcoin sector used to fluctuate due to macro market factors, such as mining activity, government policies, wars, interest rates, and large investors.
ETF’s Impact on Bitcoin Price
Min-seung has observed that the approval of spot Bitcoin exchange-traded funds (ETFs) by the United States Securities and Exchange Commission (SEC) has introduced a new market dynamic. This dynamic sees Bitcoin directly responding to movements made by stock market traders. Furthermore, he states that Bitcoin now appears to be sensitive to trends in the spot BTC market.
The researcher also highlighted that trading bots are now reflecting stock market activity. These bots in Asia and other regions are buying and selling Bitcoin based on patterns observed in stock and ETF trading.
Min-seung explained, “Bitcoin tends to rise or fall during US stock market trading hours. Those same trends are being repeated during Asian market hours. BTC spot ETF approval seems to be behind this.”
He also noted that analysts have observed a similar pattern in futures markets, with corresponding liquidations of short and long positions. However, he predicts that more institutions will enter the market, potentially increasing the correlation between Bitcoin price movements and the traditional ETF market.
Regulation Changes in South Korea
In South Korea, retail investors dominate the Bitcoin market, with corporations yet to gain regulated access. The country’s financial authorities are now looking to implement stricter rules on centralized cryptocurrency exchanges (CEXs) from next month.
These new rules will require crypto exchanges in South Korea to avoid listing tokens associated with projects that have previously been exploited. The only exception is if a project has undergone a thorough investigation into the cause of the exploitation and has implemented adequate security measures. Foreign exchanges wishing to serve the South Korean market must publish whitepapers or manuals specifically written or designed for citizens.
South Korean authorities will now have the power to order an exchange to delist a token if the issuer does not provide comprehensive information or fails other disclosure requirements. This order may also take effect if there are any differences in actual token issuance or circulation volume.
At the time of writing, Bitcoin is trading at $70,866, having risen almost 7% in 7 days and more than 2% in the last 24 hours.
