South Korea’s Cryptocurrency Trading Volume Surges, Exceeding US in First Quarter Figures

The cryptocurrency market operates on an international scale, and analyzing its varying trends offers insight into how distinct regions interact with this investment realm. South Korea, in particular, demonstrates robust enthusiasm towards the cryptocurrency industry. While countries like the USA and Canada often dominate the spotlight in Western media, South Korea’s market activity is not to be underestimated.

A recent study by Tiger Research indicates that South Korea’s involvement in the cryptocurrency market is on par with other leading nations in crypto engagement.

Insights from the Study

The year 2024 has marked a significant upturn for the crypto industry. Notable developments include the launch of Bitcoin and Ether spot ETFs in the US, along with the introduction of numerous novel tokens. The realm of meme-based cryptocurrencies has seen particular hype, with several raising substantial funds during presale phases and achieving strong market performance thereafter. Established meme tokens like Dogecoin and Pepe have maintained their popularity. Kane Pepi notes that the demand for meme tokens has reached unprecedented levels (source: https://cryptonews.com/kr/cryptocurrency/best-meme-coins).

Consequently, South Korea’s engagement figures for the year have been notably impressive. The Tiger Research report reveals that approximately 15% of South Koreans, equating to around 7.78 million individuals, engage in cryptocurrency transactions. In the year’s first quarter, cryptocurrency to fiat conversions using the Korean Won exceeded those transacted in US dollars, positioning the Won above the Euro and the Japanese Yen for the subsequent two quarters.

The report attributes the dynamic crypto market engagement to a phenomenon known as the “kimchi premium,” which addresses the notable price variations between local and global cryptocurrency exchanges, a characteristic unique to the Korean market. Influenced by the risk-seeking tendencies of Korean investors and the limitations within conventional investment channels in South Korea, the cryptocurrency market offers a popular alternative for navigating these challenges, hence its growth in the region.

The Popularity of XRP and Dogecoin

Data highlights Upbit as South Korea’s predominant crypto exchange, boasting a 70% share of the country’s crypto transaction volume. Dogecoin and XRP stand out as particularly favored tokens among the South Korean populace. While Bitcoin led in popularity for the initial three quarters of the year, XRP and Dogecoin rapidly clinched top spots by the fourth, showcasing South Korean investors’ preference for both meme coins and cross-border transaction tokens.

Comparing International Crypto Trends

South Korea’s fervent crypto adoption and transaction volumes are commendable, yet when benchmarked against other nations, we gain further perspective. The 2024 Chainalysis Crypto Adoption Index places Canada just slightly ahead of South Korea in adoption, with Statista reporting a 9% adoption rate in Canada—6% lower than South Korea. Considering the minor population difference of about 10 million, these adoption rates are remarkably similar.

Delving into specific crypto preferences, the divergence becomes evident. CoinMarketCap notes that popular CAD-crypto pairs include Bitcoin, Litecoin, Ethereum, XRP, and Bitcoin Cash. While Bitcoin, Ethereum, and XRP share popularity between Canada and South Korea, Dogecoin notably does not feature among Canada’s top five, underscoring a more conservative Canadian stance towards meme tokens. Despite the global buzz around meme coins, this is a rather intriguing finding.

Nevertheless, it is evident that South Korea is solidifying its status as a significant player in the East Asian crypto landscape, with potential to influence the global market.