Bitcoin remains soft in its performance. Could you recap the market trends since our last discussion?
Kasou NISHI: There are two main reasons why Bitcoin prices dropped from February to April. The first is a significant decline in the anticipation surrounding Bitcoin reserves.
Bitcoin has been soft since President Trump took office in the US and announced executive orders related to cryptocurrencies, with prices dropping to levels seen around November 2024 when President Trump secured an election victory. This drop is largely due to the developments in Bitcoin reserves not meeting market expectations. Without further purchases of Bitcoin, bills aimed at establishing state-level Bitcoin reserves have not yet been passed, leading to a wave of disappointed selling.
The second factor is the acceleration of trade frictions between the US and China. After President Trump issued various executive orders, the correlation between Bitcoin prices and stock indices increased, highlighting its movement as a risk asset rather than serving its role as digital gold.
However, the reason why Bitcoin's decline is less severe compared to stock indices is due to the weakening dollar. The weakening dollar is attributed to the poor performance of the US and growing distrust towards it, which has led to increased import prices and a decrease in exports due to new tariffs, particularly affecting the semiconductor industry.
In relation to semiconductors, there's also concern about the rising prices of mining equipment. This raises worries about the break-even point for miners, potentially leading to a fire sale of Bitcoin. Another point to watch is the break-even point for Bitcoin held by Strategy Corporation.
Why is that?
