Korean Investors Are Buying Bitcoin Instead Of Stocks

south korea bitcoin

Korea’s largest cryptocurrency exchange, Bithumb, saw 182 times the number of digital currency transactions made this year. Just for starters, in January there were roughly $277 million worth of transactions but by November, this figure had skyrocketed to nearly $52 billion. Reports from Business Korea state that the figure comprises more than eighty percent of $63.36 billion, which is the average monthly transaction volume in the KOSDAQ for the year.

There is concern regarding this. The sudden uptick of investment into cryptocurrencies will impact Korea’s stock exchange, which includes the KOSDAQ. Bithum has already stated that their monthly transactions have jumped month over month. April saw $593 million, which boosted to just under $5 billion. July was even larger with just a hair over $54.5 billion.

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The KOSDAQ, however, saw monthly transactions decline. April’s figures were roughly $63.7 billion, in May it dropped to roughly $51 billion, July was a bit better with around $57 billion, but then dropped again in August. On August 19th, the daily trading volume on Bithumb was $2.4 billion, which had flown past the $2.24 billion adjusted daily trading volume on the KOSDAQ for the same day.

‘With few market barriers, the cryptocurrency market revolves mainly around retail investors more than the KOSDAQ market, becoming a magnet for small investors,” said Suk Tae, a senior economist at Societe Generale Securities Korea.

With Bithumb growing, South Korea has now grown into the world’s third largest market for bitcoin trading. This is in line after Japan and the United States. There are over one million daily traders who are registered in South Korea. This extreme growth of digital currencies has begun to worry the South Korean Government.

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There have already been arguments on the topic as to whether or not South Korean government regulations on cryptocurrencies will end up slowing down the boom in crypto.

Virtual currency trading only encounters commission fees. The chief of the National Tax Agency announced that the government is going to put into place a value-added tax, a capital gains tax or both on trades. The South Korean government will make an official decision in the first quarter of 2018.


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