Record-breaking volumes are sweeping through South Korea’s cryptocurrency exchanges, surpassing even the activity on the nation’s stock market. This surge coincides with a renewed frenzy for Bitcoin (BTC), as its price continues to climb.
Fueled by Rising Prices: Local media reports indicate that South Korean crypto exchanges witnessed a record-breaking trading volume of 11.8 trillion won (around $9 billion) on Sunday. This figure eclipses the trading volume seen on the KOSPI, the country’s main stock exchange, which reached 11.47 trillion won ($8.7 billion) last Friday.
Breaking Down the Numbers: This record-breaking volume represents the combined transactions on Korea’s top five won-denominated crypto markets: Upbit (8.8 trillion won), Bithumb (2.7 trillion won), Coinone (176.4 billion won), Gopax (55.2 billion won), and MeXC (32 billion won).
Risk Tolerance on the Rise: Market observers attribute the significant crypto trading volume to a growing risk tolerance among Korean investors. Ki Young-Ju, founder of on-chain data provider CryptoQuant, suggests this stems from Korea’s history of rapid economic growth, leading investors to favor high-risk, high-return ventures. He further emphasizes the increasing wealth gap, driving individuals towards alternative investments, with altcoins gaining traction as a preferred choice over established assets like Bitcoin or Ethereum.
The “Kimchi Premium” Effect: Interestingly, these high volumes occur despite Korean crypto exchanges charging a premium on Bitcoin, Ether, and other tokens compared to global markets. This price difference, known as the “Kimchi premium,” signifies strong retail demand within Korea, with investors willing to pay extra for these assets. Bradley Park, head of research at CryptoQuant, highlights this by stating that the “Kimchi premium is at its highest since the Luna crash in May 2022,” indicating strong retail interest. Upbit’s consistently high daily trading volume since March further supports this influx of retail investors.
The Takeaway: South Korea’s crypto market is experiencing a surge in activity, fueled by the recent Bitcoin price rise. This trend suggests a growing risk tolerance among Korean investors, along with a preference for alternative investments like altcoins. The “Kimchi premium” further underscores the enthusiasm of Korean retail investors towards cryptocurrencies.
This information is not legal advice. Do your own research before making any decisions. Only invest what you can afford to lose and seek independent financial advice if needed. Understand the risks involved before purchasing any cryptoasset