The crypto market’s development – including the recent U.S. elections’ results – has brought attention to this matter on a government level. Regarding Bitcoin, South Korea has been mentioned as a country that might introduce the biggest crypto as a foreign exchange reserve.
South Korea & Bitcoin: Could it happen?
Following the suggestions from the new U.S. administration, other countries have also started considering Bitcoin as a major part of their budgets. South Korea is no exception. Multiple worldwide crypto enthusiasts emphasize the pros of this solution to the Seoul government. Moreover, some members of Korea’s Democratic Party also mentioned that idea.
However, the Korean government seems reluctant to that idea. Financial specialists point out several issues:
- Bitcoin-USD price tends to fluctuate massively. It shows that South Korea can’t rely on such an unstable asset even with a constantly growing market cap, popularity, and traders’ awareness.
- The biggest cryptocurrency may not be used immediately in case of a national emergency.
- The foreign exchange rate should consist of the currencies of South Korea’s trading partners. Bitcoin has not met this condition (at least so far).
Regarding the current situation in worldwide markets, it is unlikely that Bitcoin will become a South Korean foreign reserve currency.
Current Bitcoin situation
Despite massive announcements by Donald Trump before his inauguration, the U.S. government hasn’t made any substantial decisions regarding cryptocurrencies. The market’s dissatisfaction can be seen in the market. Bitcoin has fallen massively alongside altcoins such as Celestia, Fetch.ai, and Polygon.
BTCUSD in March
Since the beginning of this month, BTC has been moving in a horizontal trend. The breakout at $94k in the first days of March was quickly rejected, and the price is moving around $10k less, near the EMA50. Despite the sideways trend, the RSI indicates a growing bullish momentum that will last until the oscillator crosses the orange support line.
Could Bitcoin become more important to the Korean economy?
It depends on multiple aspects. Bitcoin in South Korea generates substantial interest from traders. The crypto market has become an essential part of individual traders’ portfolios and an investment asset for business clients.
Nevertheless, the Korean government seems reluctant to put so much faith in such a volatile asset as Bitcoin. The recent situation in the crypto market, highlighted by massive fluctuations, doesn’t encourage South Korea to include Bitcoin in its budget plans in the near future.
