Koreans flock to cryptos amid Trump-fueled crypto craze

The number of South Koreans investing in cryptocurrencies recently broke past 15 million — about 30% of the country’s population — for the first time, reflecting their lofty aspirations for US President-elect Donald J. Trump’s crypto push.

Bank of Korea data showed that Korea was home to 15.59 million retail cryptocurrency investors as of the end of November, up 610,000 from a month earlier.

The figure is the total number of crypto investors with accounts in the country's top five crypto exchanges: Upbit, Bithumb, Coinone, Korbit and Gopax.

After steadily increasing by about 100,000 per month since July, the number surged in November after crypto prices soared following the election of Trump, who has vowed to develop the cryptocurrency market, as the next US president last month.

Trump’s pledge to slap more taxes on imports to the US has also spooked local investors away from the traditional stock markets in Korea, one of the most trade-reliant economies, prodding them to search for higher returns in the volatile crypto market.

The price of leading crypto token Bitcoin topped 135.8 million won ($92,740) per unit as of the end of November, up from 100 million won a month earlier. 

The value of Korean digital currency investors’ holdings reached 102.6 trillion won at the end of last month, versus 58 trillion won a month earlier. It had hovered below 60 trillion won from July to October.

HIGHER TRADING VOLUME THAN KOSPI AND KOSDAQ 

The daily average crypto token trading volume on Korean crypto exchanges jumped to 14.9 trillion won, nearly matching the total daily stock trading volume on the country’s top two stock exchanges, the Kospi and Kosdaq.

It had hovered around 3 trillion won from July to October, despite a steady increase.

Deposit funds sitting idle in major Korean crypto exchanges also nearly doubled to 8.8 trillion won at end-November versus end-October, indicating big bets for a rosy outlook for the digital currency market.

Even before the latest buzz, Korea had been one of the world’s top five crypto markets.

Driven by Koreans' love of high-risk, high-return investment, crypto tokens have become deeply entwined into the Korean financial landscape.

Upbit, Korea’s biggest crypto exchange operated by Dunamu Inc., was ranked fourth by Forbes among the world’s most trustworthy cryptocurrency exchanges earlier this year.

Yet the country’s regulatory uncertainties, coupled with negative public perceptions of digital coins, continue to pose hurdles.

Write to Hanjong Choi at onebell@hankyung.com
Sookyung Seo edited this article.