South Korean Cryptocurrency Trading Volume Beats Stock Market Numbers

The last time this happened was at the height of the 2017 boom. However, Korean crypto volumes only account for 9% of global crypto trading volume compared to more than half the last time.


The trading volume in South Korea’s cryptocurrency market has exceeded the KOSPI market's daily average transaction amount, capitalization-weighted index of all common shares on the Korean Exchange (KRX) mainboard.

On March 14th, the trading volume on the four major Korean-based crypto exchanges was nearly 16.7 trillion won ($14.75 billion), per Coinmarketcap compared to just 16.56 billion won ($14.5 million) of KOSPI’s daily trading volume in March and the average daily transaction amount of KOSDAQ’s 11.4 trillion won ($10 billion), according to the local publication.

“I think last time that happened was at the height of 2017 boom,” commented DooWanNam of MakerDAO. “A lot of OG traders coming back to bet more.”

The primary driver of this much volume is the rising prices of Bitcoin, which hit a new all-time high at almost $62,000, over 70 million won, on Saturday. Up 15.3x since March lows, the digital asset has become a trillion-dollar asset while the overall crypto market cap has surpassed $1.85 trillion.

The publication notes that this uptick in price came in the aftermath of a $1.9 trillion pandemic relief bill signed by US President Joe Biden. And as expectations for inflation due to large fiscal expenditures surge, so does the demand for Bitcoin as a hedge tool.

Another driver of the rising prices is the search for high-yield investment assets, which have crypto assets emerging as a type of alternative investment destination.

It then goes on to mention the steadily increasing demand for Bitcoin investment in North America, including the world’s largest asset manager Grayscale’s AUM surpassing $44 billion, and the launch of the first-ever Bitcoin exchange-traded fund (ETF) in Canada by Purpose Investments (BTCC) which amassed more than KRW 1 trillion in assets within three weeks of its debut.

Renewed Interest

In the South Korean market, the report notes that investor deposits in stocks market funds are steadily declining by more than 10 trillion won from 74,455.9 billion won on January 12 to 63,8585 billion won at the end of last month as per the Financial Investment Association and the Financial Services Commission.

At the same time, cryptocurrency trading volumes have been exploding for the past two months when it recorded 445 trillion won exceeding the cumulative transaction amount of last year at 356.2 trillion won.

However, the involvement of Koreans in the crypto asset has decreased since 2017, only accounting for 9% of the global crypto trading volume compared to more than half during the last bull market.

But we could see it gaining pace with more regulatory clarity. A year back, the South Korean National Assembly passed new legislation to provide a framework for regulating and legalization of cryptocurrencies and crypto exchanges.

This, according to Spartan Black of crypto fund The Spartan Group, is a big development. “Korea is moving into crypto in a big way by putting a regulatory framework in place. The tech companies and banks there are embracing this and starting to put capital to work,” he said last week.

He noted how Korean retail investors were a major factor in driving the bull market of 2017, but a crackdown on exchanges dampened the investor interest and activity.

This, however, is about to change, as “major exchanges that have been good actors and are able to comply with the new regulations are starting to lean forward again with new listings and account openings,” which means we might also see the return of the Kimchi premium which was spotted earlier this year.

Korean investors also largely missed out on the DeFi rally except for a few local ones. “As exchanges add more DeFi assets, this pool of money will find their way into those DeFi leaders, sparking another leg up in the coming months,” said Spartan Black.

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