- Investor Preferences: South Korean investors exhibit a strong inclination towards altcoins and local tokens, with major cryptocurrencies like Bitcoin and Ethereum experiencing low trading volumes in the country.
- Altcoin Attraction: Traders in South Korea are drawn to the high-profit potential of altcoins, acknowledging and accepting the associated high risks.
In the bustling world of cryptocurrency trading, South Korean investors stand out with their distinctive preferences, showcasing a clear inclination towards altcoins and locally originated tokens. According to a recent report by DeSpread Research, this pattern diverges significantly from global trends, painting a unique picture of the South Korean crypto landscape.
A Deep Dive into South Korean Crypto Preferences
The data reveals that approximately 6 million South Koreans, constituting 10% of the nation’s population, are actively participating in crypto investments this year. A survey conducted by the Korea Financial Intelligence Unit (KoFIU) sheds light on this phenomenon, emphasizing the pivotal role of centralized exchanges in the South Korean crypto market.
Amidst a global downturn in trading volumes across centralized exchanges since March, as Bitcoin’s price movements remained relatively stagnant, South Korea’s local exchanges have defied the trend. Upbit, the country’s leading exchange, experienced a surge in trading volumes, even outperforming the global market leader, Binance, by July.
A notable catalyst for this upward trend was the positive development in Ripple’s legal battle with the Securities and Exchange Commission, which resulted in a significant boost in XRP’s price and trading volumes. South Korean exchanges responded explosively to this news, with the trading volumes on the four major local exchanges soaring from $27 billion in June to $37 billion in July, marking a 37% increase.
The DeSpread report highlights the South Korean traders’ pronounced fascination with altcoins, pointing out their willingness to embrace the associated high risks for potential high rewards. This trend is particularly evident on Upbit, where individual investors exhibit a strong preference for altcoins, leading to a higher proportion of altcoin trading in the Korean market.
In contrast, major global cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), and Polygon (MATIC) command substantial trading volumes worldwide, but their presence on Upbit is surprisingly muted. This stark difference underscores the unique characteristics of the South Korean crypto market, reflecting regional disparities in investor preferences and investment strategies.
Furthermore, South Korean traders display a preference for different transaction networks, with Tron’s network taking center stage due to its relatively lower transaction fees. Despite the surge in local exchange volumes, South Koreans continue to store a significant portion of their digital assets on overseas platforms, with holdings amounting to $99 billion, as reported by the country’s national tax service in September.
This nuanced portrait of South Korean crypto trading uncovers a landscape marked by a strong affinity for altcoins, local tokens, and unique transaction networks, setting it apart from global trading patterns.
