By
Chimamanda U. Martha
June 28th, 2024
In addition to the increased daily trading activities in South Korea, local crypto exchanges also experienced growth in user base well ahead of the global crypto surge that pushed prices to unprecedented levels in early 2024.
The South Korean crypto market has experienced significant growth over the past year, reaching a new height of $32.4 billion. The surge was driven by increased interest in the digital asset industry, particularly Bitcoin (BTC), which reached $73,000 in March following a two-year rebound.
Despite the crypto asset dipping below $57,000 in April and now climbing back to $66,000, it did not deter investors from engaging with the emerging economy.
South Korean Crypto Market Hits New Milestone
According to reports citing an annual survey detailing the state of the virtual asset market during the latter half of 2023, the market capitalization of South Korean virtual assets sector surged by an astonishing 43.6 trillion won ($32.4 billion).
However, this figure was only generated from licenced exchanges in the country such as Upbit, Bithumb, Coinone, Korbit and Gopax. In the last six months of 2023 alone, these companies recorded a 53% increase in market capitalization equivalent to $11.2 billion, compared to the first half of the year.
The survey findings was released on May 16 by the South Korean Financial Intelligence Unit (KoFIU), a division of the Financial Services Commission. The data were collected from 22 local exchanges and 7 wallet and custodial service providers in the country.
The study found that between July and December last year, the country’s crypto sector gained massive traction from traders looking to explore the market. The surveyed exchanges saw increased in trading volumes, daily activities and other areas of their business operations.
“Trading volume, market capitalization, operating income of exchanges, deposits in Korean won all increased compared to the first half due to the rise in crypto prices and recovery of investor sentiment. The number of crypto trading users rebounded from the first half of 2023,” said KoFIU.
Daily Trading Volume
The daily trading volume of domestic virtual assets during the latter part of 2023 reached 3.6 trillion won ( $2.6 billion). The figure represents a 24% surge compared to the first half.
In the KRW market, the average daily trading volume saw a 24% increase to $2.6 billion. Despite this increase, the coin market experienced a decline of 44% to $30,000.
The coin market refers to crypto-to-crypto transactions where traders exchange their digital asset holdings for other types of cryptocurrencies without involving national currencies like dollars or Korean won.
Individual Investors Lead Surge in Registered Users
In addition to the increased daily trading activities in South Korea, local crypto exchanges also experienced growth in user base well ahead of the global crypto surge that pushed prices to unprecedented levels in early 2024. According to the survey, active users of registered exchanges in the country soared by 390,000 to reach 6.45 million by the close of 2023.
This surge in users, accounting for over 10% of the nation’s total population, was predominantly driven by individual investors trading Bitcoin (BTC), Ethereum (Ether), and other altcoins.
This group of investors made up 99% of the total number of active registered users, with nearly 60% of them falling within the age range of 30s and 40s.