On Thursday morning, Bitcoin (BTC) was trading slightly under $65,000 after South Korea implemented its first interest rate increase in over three years to tackle inflation.
The Bank of Korea raised its benchmark interest rate by 25 basis points, bringing it to 2.75%, which aligns with the median forecasts from economists surveyed by Reuters. According to the bank's statement, inflation is expected to remain high for a while as the effects of rising energy prices take time to materialize.
South Korea's overall inflation rate surged to 3.2%, marking the highest level since 2023.
In the wake of the rate increase, the South Korean won strengthened to 1,480 against the U.S. dollar, continuing a rise from approximately 1,560 seen two weeks prior. Bitcoin's value remained stable against the won, with the BTC/KRW trading just above KRW 94.96 million on the major local exchange, Upbit.
The cryptocurrency market in South Korea is often regarded as one of the most speculative globally, fueled by a highly active retail investor base that engages with digital assets more like high-stakes trading rather than as a long-term investment.