South Korea’s crypto investor base increased by 21% in the first half of 2024: report

South Korea’s cryptocurrency investor base has grown to 7.78 million, according to a new report from the Financial Intelligence Unit (FIU). This figure represents an increase of 21% compared to the previous year.

The “Virtual Asset Business Survey” shows that domestic crypto investors increased by 1.33 million compared to the second half of 2023, driven largely by an explosive growth in the value of Bitcoin.

Investor profile and market behavior

This growth coincides with a 67% increase in average daily transaction volume in South Korea’s virtual asset market, which reached a record 6 trillion won ($4.3 billion), up from 3.6 trillion won ($2.6 billion) from the previous period. The total market valuation also rose 27% to 55.3 trillion won, or about $40 billion, in the first half of 2024.

According to the survey, male investors make up the majority, accounting for 68% (5.29 million) of crypto users in South Korea. A closer look shows that 30-year-old men are particularly active in the market, with 1.58 million participants, followed by 40-year-olds and younger age groups. Women, while making up a smaller portion of the investor base, are also increasingly contributing to this growth.

South Korean crypto-investors mainly hold modest amounts in digital assets. About 67% of these investors have assets valued at less than 500,000 won ($362). However, 10% have portfolios that exceed 10 million won, which translates to just over $7,000, while a smaller group, representing 1.3% of investors, have more than 100 million won or $72,000. High net worth individuals with virtual assets worth more than one billion won ($724,000) account for only 0.03%.

Bitcoin remains the most distributed asset, with 37.2% of investors favoring it, followed by Ethereum (11.1%), Ripple (10.6%), Dogecoin (2.8%) and Ethereum Classic (2.7%).

South Korean exchanges previously played a major role in global cryptocurrency trading, helping market volumes rise to unprecedented levels. A 2023 report by CCData showed that the country’s share of the global digital asset market volume increased from 5.2% in January to 12.9% in November.

Price volatility

Price volatility remains an important feature of the country’s market. Volatility has increased, with the Maximum Drawdown (MDD), a measure of the fall in prices from peak levels, up to 70%, compared to 62% in the second half of last year. In comparison, the MDD of South Korea’s main stock index, the KOSPI, was 14% over the same period.

The FIU noted that increased funding to US spot Bitcoin exchange-traded funds (ETFs) and US presidential candidates’ digital asset support policies have influenced these price movements. The report also warned investors to be cautious due to increased fluctuations.

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