Korea’s FSC Opposes Other Agencies’ Involvement in Virtual Asset Bill

Bitcoin is facing growing uncertainty as it trades near $90,000, down nearly 30% from its October peak of $126,000. While the cryptocurrency remains under pressure, investors are increasingly focused on Tokyo, where a potential change in monetary policy could tighten global liquidity. According to CoinDesk, which cited a report from Nikkei, the Bank of Japan (BOJ) is expected to raise its policy rate by 25 basis points to 0.75%, a move that would push borrowing costs to their highest level in nearly three decades. Historically, a stronger yen has often been associated with weaker Bitcoin performance amid tighter global liquidity.Photo by Kanchanara on UnsplashYen carry trade in focusThe report suggested that higher rates could unwind the yen carry trade, a strategy in which investors borrow cheap yen to fund positions in higher-yielding assets such as stocks and U.S. Treasuries. A similar dynamic played out following the Japanese central bank’s July hike, which precipitated a market-wide selloff that dragged Bitcoin from roughly $65,000 down to $50,000. However, CoinDesk noted that a recurrence of such volatility cannot be assumed. It added that speculative positioning is already skewed toward yen strength, while steadily rising Japanese bond yields suggest monetary policy is adjusting to prevailing market realities. Institutional skepticism toward BitcoinBeyond the macroeconomic landscape, fundamental skepticism remains entrenched among traditional finance heavyweights. John Ameriks, Vanguard’s global head of quantitative equity, said at Bloomberg’s ETFs in Depth conference that the asset behaves more like a speculative digital collectible, comparable to a Labubu toy, than a conventional investment, citing its lack of income generation, compounding, and cash-flow characteristics. Ameriks’ comments follow Vanguard’s move earlier this month to permit trading of select third-party crypto ETFs. He said the decision was based in part on the funds’ ability to establish a track record since their January 2024 launch. While acknowledging that Bitcoin could theoretically offer value during periods of high inflation or political instability, he maintained that its history remains too short to draw conclusions. Bullish case for BitcoinA contrasting view was offered by Katherine Dowling, president of the Bitcoin Standard Treasury Company. Speaking with DL News, Dowling projected that Bitcoin would surge to $150,000 by the end of 2026. She pinned this bullish outlook on favorable U.S. regulatory shifts, increased liquidity from Federal Reserve rate cuts, and sustained institutional adoption via ETFs.The perceived influence of institutional flows was also underscored by a recent weekly survey of 2,000 South Korean investors conducted by CoinNess and Cratos. The data showed that 42.3% of respondents view flows into and out of spot Bitcoin ETFs as the primary price driver. Monetary policies in major economies like the U.S. and Japan ranked second at 26.7%, while 16.3% pointed to shifts in equity markets. Another 11.5% attributed price action to the halving cycle, and 3.4% said they could identify no specific catalyst.

OmniBOLT to Support BRC-20 Tokens on LightningSingapore’s OmniBOLT, a project that’s developing technological solutions within bitcoin’s layer two network environment, has outlined that it will support BRC-20 tokens on Lightning Network.Before we consider precisely what OnmiBOLT's decision to support BRC-20 tokens means, let’s cover the backstory.Photo by Sander Weeteling on UnsplashBRC-20BRC-20 is an experimental token standard which was created by an anonymous developer with the handle “Domo”, and username ‘@domodata’ on Twitter. A token standard governs how and where a cryptocurrency can be used. The approach has been pioneered by developers on the Ethereum blockchain who created the ERC-20 standard a number of years ago, relative to the Ethereum network.A bitcoin evolutionIn this instance, BRC-20 is a fungible token standard designed for the bitcoin blockchain. Bitcoin development is very slow and conservative, and deliberately so, in an effort to put network security first. However, it has had two major upgrades over the course of the last few years, namely SegWit and Taproot.Many in crypto have been critical of the bitcoin project on the basis of it being a pet rock that lacked features and the flexibility to use it in other ways aside from as a store of value or means of exchange. However, those protocol upgrades have led to further development that is expanding bitcoin’s use case and versatility.SegWit and Taproot enabled the development of Bitcoin Ordinals in January 2023. Ordinals provide a means to create Bitcoin non-fungible tokens (NFTs), by attaching data to individual satoshis, the smallest denomination of Bitcoin. NFTs created this way are immutable as they’re not created on side chains but on the bitcoin blockchain itself.In a fast moving scenario, the development of Ordinals led two months later to the emergence of the BRC-20 standard. BRC-20 tokens can be stored on the bitcoin base-chain, built with the assistance of Ordinals. BRC-20 is an exciting development as it stands to enable smart contract capabilities relative to bitcoin.Solving the bitcoin fee issueMany see this development as a solution for the longer term fees issue that the bitcoin blockchain will have to overcome. Bitcoin miners are compensated in mining rewards but the level of rewards is being cut in half every four years. The concern is that in the longer term, there may not be enough revenue for miners to continue to secure the network effectively.With the development of Bitcoin Ordinals, more fees are generated, and so this is seen as a means through which the network can sustain itself over the longer term.Mempool backlogSo what’s not to like? The issue that has arisen over the past few days is that bitcoin transaction fees have hit a two year high. Over the past few days, there have been in excess of 400,000 unconfirmed bitcoin network transactions sitting in the mempool. The mempool is a mechanism within the bitcoin protocol that stores the data relative to a queue of transactions that are waiting to be confirmed.Relieving pressure on bitcoinThat brings us back to the significance of the Singaporean team of developers at OmniBOLT deciding to support BRC-20 tokens on the lightning network. That move can relieve the pressure on the bitcoin mainnet. The project is being backed by Waterdrip Capital, Danhua Capital, Redline DAO and others.Bitcoin has been a boring protocol and many have celebrated that fact as a feature and benefit for a network that serves a couple of vitally important use cases exceptionally well. However, development never stops and it’s fascinating to see another side to the protocol unfold, and all the while, it’s not entirely clear where it will end.

As the cryptocurrency market anticipates the approval of a spot bitcoin exchange-traded fund (ETF) in the United States and the subsequent boost to bitcoin’s unit price, Arthur Hayes, Chief Investment Officer (CIO) of family office Maelstrom, has issued a warning of potential market turbulence. Hayes, better known as the founder of crypto derivatives platform BitMEX, has moved on to Hong Kong-based Maelstrom, a family office that invests in early stage infrastructure ventures that implicate a move towards the decentralization of everything.Photo by Kanchanara on UnsplashMacroeconomic risk factorsIn a detailed blog post on Friday, Hayes outlines a number of macroeconomic variables that could lead to a bitcoin unit price downturn. Hayes begins by highlighting the depletion of the Federal Reserve’s reverse repo program (RRP), which has served as a significant driver for risky assets over the past year. This program allows qualified banks and investment firms to park cash and earn interest on it. The RRP balance has rapidly declined from a record high of $2.5 trillion at the end of 2022 to $700 billion. Hayes projects it to reach its historical average of $200 billion by March. As this liquidity source dwindles, he anticipates negative impacts on bonds and stocks, as well as cryptocurrencies. Fed BTFP expirationThe second factor contributing to the potential market turmoil is the expiration of the Bank Term Funding Program (BTFP) on March 12. This crucial Fed facility is designed to provide longer-term loans to commercial banks. The mechanism aids banking sector stability. Hayes is concerned that the BTFP might not be extended. Such an eventuality could lead to bankruptcy for banks holding massive unrealized losses on their bond holdings. It could lead to a “liquidity rug pull” event reminiscent of the banking crisis in March of the previous year. The crypto OG predicts that such an eventuality would force a response. “The combination of a lack of liquidity gushing from the RRP and the lack of printed money to cover the bond losses on banks’ balance sheets will decimate the financial markets globally,” he wrote. Hayes asserts that the combination of reduced liquidity from the RRP and the lack of printed money to cover bond losses could have a global impact on financial markets. In response to this scenario, he predicts that the Fed will cut interest rates during its March 20 meeting and reinstate the BTFP funding line. ‘Healthy’ correctionIn terms of bitcoin’s price, Hayes foresees a “healthy” correction of 20% to 30% from early March prices if the outlined scenario unfolds. However, he suggests the decline could be as much as 40% if BTC rallies to $60,000-$70,000 in the coming weeks. Despite this temporary plunge, Hayes remains optimistic about bitcoin’s resilience, emphasizing its status as a neutral reserve hard currency that is not a liability of the banking system and is traded globally. In a recent podcast appearance, Hayes expressed the view that the business model of U.S. dollar stablecoin issuer Tether will be challenged once multinational banks receive the go-ahead to offer fiat-backed stablecoins. Overall, Arthur Hayes has urged investors to be cautious and to prepare for potential market volatility in March, emphasizing the importance of understanding the interconnected factors influencing both traditional finance and the cryptocurrency market.