South Korea is seeing a boom in cryptocurrency investment, with the number of crypto investors jumping to 7.78 million, 21% increase from last year.
Higher price, more attractive asset, many new investors
The financial authority, the FIU’s new report, titled Virtual Asset Business Survey, reveals that this growth includes an additional 1.33 million investors compared to the second half of 2023.
Much of this excitement can be traced back to a huge rise in Bitcoin’s price, which attracted many new investors.
Interestingly, the average daily transaction volume in South Korea’s virtual asset market has also jumped by 67%, reaching a record high of 6 trillion won, or about $4.3 billion. This is up from 3.6 trillion won in the previous period.
Overall, the market’s total valuation climbed by 27%, now sitting at around 55.3 trillion won in the first half of 2024.
The investor demographics, who’s investing?
When it comes to who’s investing, men dominate the scene, making up about 68% of crypto users, around 5.29 million people.
Men in their 30s are particularly active, with around 1.58 million participants, followed closely by those in their 40s.
Women represent a smaller slice of the investor pie, but it’s clear that they are increasingly joining the ranks.
Most South Korean crypto investors are holding modest amounts in digital assets. About 67% have investments valued at less than 500,000 won, around $362.
But there’s a small group, about 10%, that holds portfolios exceeding 10 million won. Only a tiny fraction, about 0.03%, have more than 1 billion won in virtual assets.
Bitcoin is still the favorite among investors, with 37.2% choosing it as their primary asset. Ethereum follows with 11.1%, then Ripple at 10.6%, Dogecoin at 2.8%, and Ethereum Classic at 2.7%.
A shift in market dynamics
South Korean exchanges and markets have historically played a central role in global crypto trading, helping to drive market volumes to new heights.
South Korea’s share of global digital asset market volume jumped from 5.2% in January to an impressive 12.9% by November.
But price volatility still remains a major theme in this market. The Maximum Drawdown—a measure of how much prices fall from their peak—has increased to 70%, up from 62% last year.
For comparison, South Korea’s main stock index, the KOSPI, experienced only a 14% drawdown during the same period.
The FIU pointed out that rising investments into U.S. spot Bitcoin ETFs and supportive digital asset policies from U.S. presidential candidates have played a role in these price fluctuations.
They also cautioned investors to tread carefully due to these increased market swings.
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