Bitcoin’s record-breaking rally past $100,000 on Thursday underscored a day of mixed performance across Asia-Pacific markets, as investors balanced optimism over potential US interest rate cuts with uncertainties from political upheavals in South Korea and France.
Wall Street’s record highs earlier in the week further buoyed sentiment in some regions, while lingering concerns over global economic and political developments tempered gains elsewhere.
The cryptocurrency surged to an intraday high of $103,844, fueled by growing institutional interest and optimism over a friendlier regulatory environment in the US Exchange-traded fund (ETF) inflows have played a significant role in Bitcoin’s ascent, according to Geoff Kendrick, global head of digital assets research at Standard Chartered.
“The $100,000 mark is symbolic but reflects the increasing institutionalization of the industry,” Kendrick said.
Meanwhile, Asia-Pacific markets delivered a mixed performance.
Japan’s Nikkei 225 climbed 0.6% to reach a three-week high, while Australia’s S&P/ASX 200 edged 0.21% higher.
In contrast, Hong Kong’s Hang Seng index slipped more than 1%, weighed down by selling pressure, and mainland China’s CSI 300 shed 0.1%.
South Korea’s Kospi fell 0.44%, while the Kosdaq rose slightly, as investors grappled with escalating political tensions.
Political upheaval
In South Korea, President Yoon Suk Yeol’s declaration and subsequent reversal of martial law sparked a motion to impeach him, further destabilizing markets.
The Bank of Korea and the finance ministry stepped in with liquidity support measures, but analysts warn of long-term risks.
“Political uncertainty could raise South Korea’s risk premium and weigh on investor confidence,” Alex Smith, head of equities at abrdn, told CNBC.
In France, a historic no-confidence vote led to the collapse of Prime Minister Michel Barnier’s government, adding another layer of uncertainty in European markets.
Political instability has also kept the euro under pressure, trading near $1.0520.
Wall Street’s highs and US rate cut expectations
In the US, all three major indexes—Dow Jones, S&P 500, and Nasdaq—closed at record highs on Wednesday.
The Dow crossed the 45,000 threshold for the first time, while the tech-heavy Nasdaq jumped 1.3% to finish at 19,735.12.
Investors are increasingly optimistic about a potential U.S. interest rate cut, with markets pricing in a 78% chance of a December rate reduction, according to CME Group’s FedWatch tool.
Fed Chair Jerome Powell’s balanced remarks on Wednesday, highlighting the economy’s resilience, further fueled hopes of policy easing.
Market attention now turns to Friday’s US unemployment report, which could offer fresh insights into the Federal Reserve’s next move.
Commodities and currency movements
In commodity markets, Brent crude oil inched up 0.2% to $72.42 a barrel ahead of an OPEC+ meeting, where production cuts are expected to be extended.
Gold prices held steady at $2,649 an ounce.
The US dollar tracked lower alongside falling Treasury yields.
The yen gained slightly, trading at 150.31 per dollar, while the Australian dollar nursed losses after disappointing GDP data earlier in the week.
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