8% of South Korean Population Has Risked It All on Cryptocurrencies
“Every Korean knows bitcoin and other altcoins,” said crypto exchange Zeniex CEO Choi Kyung-joon.
Statistics reveal that there are 3.5 to 4 million crypto investors in South Korea, which is equivalent to about 2 out of every 25 citizens. The white collar group, students, even grandparents risk it all on cryptocurrencies. This helps explain why the country can be the world’s No. 3 market in cryptocurrency trading, after Japan and the U.S., although its population is not large.
Especially, South Korea leads in trading volume of many altcoins worldwide because Koreans prefer to invest in relatively low-priced tokens, as Choi explained in an interview with tech media startup SVInsight, which could reduce their investment cost, while could see altcoins easily double or even triple in value in a very short period of time. The price surge of many altcoins, like ADA and SNT is indeed driven by South Koreans. The daily trade volume of these cryptocurrencies could even hit $ 2 billion in the country.
In fact, the high trading volume of cryptocurrency in South Korea can be seen as a reflection of its financial market’s openness and dynamics. Meanwhile, it also signals that the country lacks high-yield investment vehicles for retail investors.
The cryptocurrency boom also brings many problems, for example, hacking attacks on cryptocurrency exchanges and ICO scams. In addition, the booming digital-currency market is worrying the South Korean government. Authorities has gradually intervened the unregulated market to set cryptocurrency trading and ICO activities on the right path. But the government remains ambiguous on the subject until today.
Choi that it is an inevitable trend that the South Korean government will recognize virtual currency, and gradually bring cryptocurrencies within the ambit of existing regulatory regimes. However, both the South Korean government and the Blue House have passive stance in dealing with cryptocurrencies.
“ Blockchain players can feel the government’s negative attitude, for example, it has exerted pressure on new and small , medium-sized crypto exchanges through commercial banks.” Choi said.
South Korea regulators have required domestic commercial banks to refuse to open accounts with cryptocurrency exchanges that do not disclose information about suspicious trading. So far only four of the running exchanges in South Korea—Upbit, Bitthumb, Korbit, and Coinone—-have been allowed to open accounts at commercial banks.
Choi also offered interesting investment tips for crypto enthusiasts.
“The biggest difference between retail investors and professional investors not lies in the selection of coins, but the timing of buying and selling coins. Trading at the wrong time will let you suffer great loss.” Choi said.
But when is the best time to buy cryptocurrencies? Choi gave a very simple answer: keep an eye on news headlines. If key words like “bitcoin crashes”, “ the bear market is coming” appear repeatedly in news headlines, it is a good time to buy in; however, if you see words like “bull market”, “ XX price surge” for multiple times at a certain time, then it is good time to cash out.