Crypto Craze: South Korea’s Bitcoin Surge Overtakes Stock Market Trading

• Korea-based crypto exchanges have recorded a trading volume of 12 trillion won on Sunday, surpassing Friday’s stock market tally of 11.47 trillion won.
• Koreans are increasingly turning to alternative investments, with altcoins being preferred over major assets like BTC or ETH.

The rising prices of bitcoin (BTC) have revived a crypto trading frenzy in South Korea, with volumes on local exchanges crossing those in the local stock market. This has marked a significant milestone in the country’s financial landscape.

According to local media reports, the trading volumes on South Korea-based crypto exchanges totaled a record 11.8 trillion won (KRW) on Sunday, which is equivalent to $9 billion at the current USD-KRW exchange rate. This has surpassed Friday’s South Korean stock trading volume of 11.47 trillion won, which translates to $8.7 billion.

This figure represents the combined transaction amount of Korea’s five largest won markets, including Upbit (8.8 trillion won), Bithumb (2.7 trillion won), Coinone (176.4 billion won), Gopax (55.2 billion won), and Coinone (32 billion won).

The five top crypto markets on Upbit are the won-traded pairs of bitcoin (BTC), space id (ID), IQ Protocol’s IQ, 0x’s ZRX, and shiba inu (SHIB). This reflects the Korean market’s growing interest in alternative investments, particularly in altcoins.

Local market observers suggest that the relatively higher volume in the crypto market indicates an increased risk tolerance among Korean investors. This trend is fueled by the nation’s rapidly growing economy and widening wealth gap, leading more people to turn to high-risk, high-return investments.

Ki Young-Ju, founder of on-chain provider CryptoQuant, shared, “Koreans favor high-risk, high-return investments because they experienced a rapidly growing economy. With the increasing wealth gap, more people are turning to such investments, with altcoins being the preferred choice over major assets like BTC or ETH.”

The high volumes on Korean exchanges are despite bitcoin, ether, and other tokens trading at a higher markup than their global counterparts, indicating strong retail demand.

Bradley Park, head of research at CryptoQuant, shared, “The kimchi premium is at its highest since the Luna crash in May 2022. It is often seen as a sign of strong retail demand, as Korean investors are willing to pay a premium for Bitcoin.”

He also added, “Upbit’s daily trading volume has remained high since March after reaching 60K. It further supports the evidence of retail inflow.” This further reinforces the notion of strong retail demand in the Korean market.

The “Kimchi premium” refers to the difference in Bitcoin prices on Korean exchanges compared to global bourses. Bitcoin is currently trading at a 10% premium in South Korea, opening up an arbitrage opportunity for traders to buy bitcoin on an international exchange and sell it on a Korean exchange for a riskless profit in Korean won.