In the second week of June, the virtual asset market showed an upward trend until mid-week due to expectations of interest rate cuts and optimism over trade negotiations, but gave up its gains towards the end of the week when news of Israeli airstrikes in the Iranian capital, Tehran, broke.
Bitcoin closed up 1.5% for the week at $103,414, while Ethereum recorded a 3.1% increase to $2,522. In the altcoin market, some assets showed strong gains, including KAIA (+23.93%), SPX (+16.02%), and AB (+13.74%).
◇ Bitcoin rises on rate cut expectations, but plummets due to geopolitical risks
The rise of Bitcoin was supported by U.S. consumer price index (CPI) and producer price index (PPI) figures for May, which both fell below market expectations, reaffirming the slowdown in inflation. Additionally, jobless claims hit an eight-month high, indicating a clear signal of a cooling labor market. As a result, expectations for interest rate cuts increased, and the market began to consider two rate cuts within the year.
These expectations of interest rate cuts improved investment sentiment across risk assets, and the virtual asset market continued its upward trend. Expectations for easing trade tensions also supported investment sentiment in risk assets. The U.S. and China reached a 'principled agreement,' and China resumed exports of certain rare earth items. Former President Trump noted that 'all necessary rare earths will be supplied by China in advance payment form,' emphasizing negotiation progress even amid a tough stance.
However, the market atmosphere shifted dramatically with the news that Israel conducted a surprise airstrike on the Iranian capital, Tehran, on Friday. The Middle East is a major oil production area, and the emergence of geopolitical risks directly affects oil prices. Rising oil prices can stimulate inflation, which may lead to a retreat in interest rate cut expectations, thus putting significant adjustment pressure on risk assets, including virtual assets.
◇ Digital asset basic law proposed in National Assembly…Signal for institutionalization of won stablecoin and market expansion
The Democratic Party of Korea officially proposed the 'Digital Asset Basic Law' on the 10th, which aims to introduce a won-based stablecoin and revitalize the digital asset market, as promised by President Lee Jae-myung. This bill is attracting industry attention as it incorporates virtual assets into the financial product realm and establishes a comprehensive framework covering issuance, disclosure, transaction support, and supervision.
In particular, the bill allows leveraged transactions like in capital markets and sets the requirements for issuing won stablecoins as a pre-approval system with a minimum capital requirement of 500 million won, significantly lowering the market entry threshold. This proposal signals a change across the structure of the industry and is generating positive expectations within the market. In fact, the anticipation surrounding the introduction of won stablecoins has led to soaring prices for some fintech companies like Kakao Pay and other virtual assets, while interest in institutional beneficiaries is also rising.
However, as the utilization in the real economy requires several legislative amendments to be carried out in parallel, there is a need to consistently monitor the speed and direction of policy implementation. Hwang Hyo-jun, a researcher at the blockchain research institute, stated, 'This week, the market continued its positive flow in terms of interest rates and trade, but a new variable of geopolitical risk is shaking short-term sentiment,' and emphasized that a sensitive response to supply-demand flows and external variables is necessary in periods of increased price volatility.
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