Retail investors in South Korea showed a significant increase in their engagement with local digital-asset exchanges even before the global surge in cryptocurrency prices in early 2024.
The semi-annual report on crypto-asset businesses, published by the Korea Financial Intelligence Unit (KOFIU), states that active users of registered exchanges in South Korea grew by 390,000 to reach 6.45 million by the end of 2023.
KOFIU said in a statement, “Trading volume, market capitalization, operating income of exchanges, deposits in Korean won all increased compared to the first half due to the rise in crypto prices and recovery of investor sentiment.”
The South Korean won became the most traded currency against crypto-assets globally in the first quarter of 2024, surpassing the US dollar. Upbit, the leading exchange in the country, has even ranked among the top five exchanges globally by trading volume at times.
The report added, “The number of crypto trading users rebounded from the first half of 2023.”
Of these users, which represent over 10% of the country’s total population, there were mainly “individual” investors, with 99% falling into this category, and almost 60% of these investors were in their 30s and 40s.
During this period, the daily average crypto trading volume in South Korea increased by 24% to 3.6 trillion won ($2.6 billion), while the total value of crypto held by registered exchanges surged by 53% to 43.6 trillion won.
Despite the collapse of TerraUSD, a stablecoin created by South Korean native Do Kwon, the enthusiasm for cryptocurrency in South Korea remains so strong that a major political party promised to provide Koreans access to US Bitcoin ETFs during the recent parliamentary election.
Starting in July, South Korean regulators will implement the Virtual Asset User Protection Act, which will introduce strict new requirements for exchanges and harsher penalties for misconduct in the sector.
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