South Korea: Assessing 2023’s unique growth trends in the crypto market
- Approximately 6 million South Koreans became crypto investors this year
- South Korean traders have a strong preference for altcoins and are less enthusiastic about major tokens
South Korea has seen a surge in crypto trading activity. Local exchanges have outperformed their global counterparts in terms of trading volume. According to a report by DeSpread Research, approximately 6 million South Koreans have become crypto investors this year. This accounts for almost 10% of the population. The majority of these investors are actively trading on centralized exchanges. Thus, indicating the significant influence of such platforms in the Korean crypto market.
Centralized exchanges across the globe experienced a decline in trading volume since March. This was largely due to Bitcoin’s [BTC] sideways price movement. However, South Korea’s local exchanges witnessed trading volume growth that surpassed that of global leader Binance by July. Upbit, the country’s largest exchange, was one.
One reason for this growth was the positive impact of Ripple’s [XRP] price and trading volume following a favorable ruling in Ripple’s court case against the U.S. Securities and Exchange Commission (SEC).
Altcoins reign, and local exchanges dominate
DeSpread Research highlighted that South Korean traders have a strong preference for altcoins and are less enthusiastic about major tokens like Bitcoin, Ethereum [ETH], and Polygon [MATIC]. This trend is attributed to the appeal of high-profit potential altcoins, despite their associated risks. This regional preference is considered a key factor contributing to the dominance of altcoin trading in the South Korean market.
The report mentioned that cryptocurrencies such as BTC and ETH, which have significant trading volumes globally, show relatively lower trading volume within the Upbit exchange. This observation underscores the distinct characteristics of Upbit compared to the global market and reflects the regional variations in investor preferences and strategies.
Furthermore, the report revealed that South Korean traders favor using Tron’s network for their transactions due to its relatively lower transaction fees. This preference for Tron’s network is another example of how South Korea’s crypto market deviates from global norms.
While South Korean exchanges have experienced a notable recovery in trading volume, the report noted that South Korean traders still tend to use overseas platforms for storing their digital assets. A September report from South Korea’s national tax service indicated that South Koreans hold approximately $99 billion in digital assets stored overseas.