[Start Economy] "Consent to a two-year grace period on virtual assets"...Bitcoin Is $100,000 'On the horizon'

■ Host: Anchor Lee Jung-seop, Anchor Cho Ye-jin
■ Starring: Professor Chae Sang-mi, Department of Business Administration at Ewha Womans University

* The text below may differ from the actual broadcast content, so please check the broadcast for more accurate information. Please specify [YTN News START] when quoting.

[Anchor]
We give you the latest economic news quickly and kindly. Start Economy, today we will be with Chae Sang-mi, a professor of business administration at Ewha Womans University. Let's start by talking about our investment tax. As you just saw, Democratic Party floor leader Park Chan-dae has announced that he has agreed to a two-year grace period for virtual asset taxation. Following the financial investment income tax earlier, we took a slight detour this time. What's the background?

[CHAE SANGMI]
Since virtual asset investors are suddenly trying to pay taxes, they will protest a lot, so they seem to be conscious of this. Then, I think there was a concern about a headwind by discussing the tax increase as an opposition party. But what's more important than this is to impose taxes on domestic traders for virtual asset transactions. However, since the taxation system is not yet perfect, how to tax transactions on overseas exchanges, and because there are various problems like this, you have to make them perfect and then tax them. The opposition's policy committee continued to discuss pros and cons. Here, it is analyzed that the opposition party put weight on practical feasibility.

[Anchor]
The tug-of-war lasted for four years. Is there any confusion or side effects as it is postponed and repeated like this?

[Chae Sang-mi]
Of course there is. It naturally confuses investors. When taxation is decided, the amount of investment and plans should be adjusted, but there were some areas that caused disruptions to investment due to uncertainty about taxation. More importantly, there may be problems such as criticism of policy consistency with the government and the National Assembly, or a decrease in credibility. Then there is a gap after expecting taxation to be implemented, so speculative investment chasing short-term investment profits is likely to increase.

[Anchor]
After all, if you look at the virtual asset investor class, there are a lot of young people. So I'm cheering in this part, but the community is saying, "We don't have to sell it because we don't pay taxes anyway, let's water down, let's burn." There are also voices of concern that it will eventually encourage speculation, what do you think?

[CHAE SANGMI]
On the negative side, of course, the tax burden disappears, raising the possibility of expanding short-term speculative investment. However, it seems positive in terms of creating an environment where fair and fair taxation is possible because time for institutional maintenance is secured through the suspension of taxation. So, as we have postponed it, I think we need to make the market safer by making investor protection policies and balanced regulations well.

[Anchor]
In the midst of this, Bitcoin is looking to surpass $100,000. Some will make another leap after adjustment, no, $100,000 is a big wall. These comments are coming out, so what do you do with the outlook for Bitcoin?

[CHAE SANGMI]
First of all, the opinion that it will be adjusted is that when it reaches $100,000, psychological resistance is created. So, of course, there is a high possibility that selling will increase due to the realization of the difference in the short term, so there is a possibility that it will fall. Then there is the possibility that the global regulatory environment will increase. There is also an opinion that the adjustment will be made because of this. There are many opinions that there is a possibility of another leap after adjustment. Because in the United States, coins such as Bitcoin and Ethereum were incorporated into the institutional sphere. As a result, institutional investment has increased very much. Then, due to the Trump administration, expectations for deregulation have risen a lot, and ETFs are expanded, resulting in an increase in global investment demand, so overall, it will maintain an upward trend in the long run. However, it is expected that there will be a lot of volatility, so you should pay attention to this part.

[Anchor]
I've looked at a lot of things. The economic issue these days is the subscription service. Subscription services are very popular in home appliances, but LG Electronics is the only leader, and Samsung Electronics is also starting an AI subscription club?

[CHAE SANGMI]
Samsung Electronics has entered the subscription competition with a service called the AI Subscription Club. This is because, from the perspective of early consumers, once they buy a home appliance, they use it for 10 years. There are a lot of new products coming out, but the price is very high. If you use this subscription economy, the initial burden is eased, and consumer accessibility is greatly expanded. Then, in the case of Samsung, we have a platform that can provide customized services based on AI that wants to increase customer service by securing various data using SmartThings and IOT. And as a result, LG Electronics entered the market first, and it seems that various factors such as strengthening its position as a latecomer through competition have worked.

[Anchor]
But the front-runner performs well. The cumulative sales exceeded KRW 1 trillion in the third quarter of this year, so how do you expect Samsung Electronics to catch up with LG Electronics?

[CHAE SANGMI]
LG Electronics entered the subscription economy first as a water purifier rental business in 2009, and as you said, it has already proven its market preoccupancy effect by surpassing KRW 1 trillion in 2023. In the case of Samsung Electronics, there is brand power. Next, we are pushing around home appliances equipped with AI technology. That's why they're saying they'll provide more differentiated services. As I said, young people are very familiar with the subscription economy recently, so it is a market with great potential growth potential in line with this subscription economy trend.

[Anchor]
As you mentioned earlier, once you buy a home appliance, it will be 10 years, so the possession rate and supply rate are high, but the home appliance market has stagnated. Still, why is the subscription service in the spotlight?

[CHAE SANGMI]
It's very burdensome to buy a large amount of home appliances in the early stages, but the initial purchase cost is very reduced, if you buy it with a subscription economy. Then, home appliances equipped with the latest technology come out, and the experience of using these home appliances increases. You can see it like this. From a company's point of view, subscription profits can be secured stably. Next, in the case of various AI-based home appliances, customer data can be continuously secured and more customized services can be provided using this. Then, if you analyze the market environment, the home appliance economy has stagnated, as you said. However, it is appearing as a more popular service because it can secure sustainable profits.

[Anchor]
In the midst of competition between the two runners, I think consumers can expect high-quality services in the meantime. Let's move on to the next topic. There's nothing that hasn't gone up these days, but especially the price of chocolate snacks has gone up a lot. Is there a special reason why there is a word called chocolate inflation?

[CHAE SANGMI]
In the case of chocolate, the reason why the price has risen recently is because the price of cocoa has soared. Cocoa is the main ingredient for chocolate and chocolate snacks. However, it seems that it directly affected the price fluctuation. If you look at the rise in cocoa prices over the past year, it's up 117% per ton. It's 246% higher than the average year. This is because of climate change. The decline in production was very key due to climate change, because if you look at West Africa, a major cocoa producer, it suffered severe crop deterioration due to drought and El Niño. The resulting decline in production is mainly attributable to limited supply and thus a surge in international cocoa prices. Therefore, confectionery companies have begun to reflect the burden of rising raw material prices in consumer prices. Domestic confectionery companies, including Orion and Haitai Confectionery, are increasing the price of chocolate snacks by an average of 8% to 20%, which is very affecting the market as a whole.

[Anchor]
For parents who raise children who like snacks, the price of chocolate snacks has also risen, so I think I will sigh. And it's not easy to find the word "leave a cup of coffee," but the price of coffee beans has risen a lot?

[CHAE SANGMI]
If you look at the price of beans, it's reaching a new 47-year high. This is having a huge impact on consumers as a result. The international price of Arabica beans is $3.2 per pound. This is the highest level since 1977. Robstar beans were also up more than 80% as they surged to more than $500 a tonne. The rise in coffee bean prices is also attributed to climate change, and Brazil and Vietnam, the world's largest producers, have seen their yields drop significantly due to El Nino and drought. The U.S. Department of Agriculture has cut its forecast for Brazil's 2024 coffee production to 66.4 million tonnes from 69.9 million tonnes previously. In addition, President-elect Trump changed his tariff policy. So these policies also affected the price increase a lot. It is analyzed that the price of beans was raised further because the supply and demand imbalance occurred as coffee companies competed to secure supplies before tariffs were imposed.

[Anchor]
We're very sad because we're only telling you that we're always on the rise while delivering the news of the economy.If the price of raw materials such as dried cocoa and beans continues to rise, won't it eventually cause inflation?

[Chae Sang-mi]
Since the price of cocoa and beans has risen, it will be directly linked to the consumer price of chocolate and coffee. It seems that it will also put pressure on overall prices. In the case of chocolate products, the increase in cocoa costs has been quickly reflected in consumer prices. Next, coffee beans are also affecting the price of instant coffee, coffee mix, and cafe drinks. So there is a time difference of 3 to 6 months for this rise in coffee beans prices to be reflected in consumer prices. Again, rising raw material prices will inevitably lead to an increase in living costs for consumers in the short term. In the long run, it is certainly likely to be a major factor in inflation. In particular, it was caused by climate change, so if cost increases continue, it is expected that there will be a series of price increases across related industries such as restaurant, confectionery, and cafe franchises.

[Anchor]
As the global temperature rises, prices are doubling. Finally, let's look at the New York Stock Exchange. Last week was short because of Thanksgiving, what are some issues to look at this week?

[CHAE SANGMI]
If you look at the New York Stock Exchange this week, various indicators that can diagnose the U.S. economy are about to be announced. Importantly, the announcement of employment indicators is expected to be a very important clue for the Fed to decide whether to cut interest rates at the FOMC in December.
The PMI and global manufacturing PMI confirmation will be announced today, December 2nd. This is a very important indicator for judging the manufacturing business flow. Then, on the 4th, the ADP Private Employment Report and the PMI will be released. This is used to diagnose the labor market and the service market in the United States. Then, on the 6th, the non-agricultural employment report and the unemployment rate are scheduled to be released, so it seems to be a key data showing the overall strength and policy direction of the market.

[Anchor]
He even pointed out the main schedule. The New York Stock Exchange is now strengthening, and I think there are high expectations that it will continue to Santa Rally following the Trump rally.

[CHAE SANGMI]
The New York Stock Exchange showed a record rise this year. It is predicted that it is likely to remain on the rise in December.
Because the S&P 500 is up more than 27% this year. So if you look at the existing data, there is a record that there was an additional rise in December with a 76% probability in a year that rose more than 20% annually through November. When you refer to this, you can expect Santa Rally. Because expectations for the strong year-end stock market, called Santa Rally, are also very high.

[Anchor]
So far, I have been with Chae Sang-mi, a professor of business administration at Ewha Womans University. Thank you for talking today.