Decoding the South Korean Financial Commission Report Market Capitalization Growth Lags Behind Global Average 15 of Population Holds Exchange Accounts
The Financial Services Commission (FSC) of South Korea, a committee directly under the Prime Minister, has recently published the results of its virtual asset business survey for the first half of the year. This survey can be considered the most comprehensive investigation of the South Korean market to date.
South Korean Market’s Total Market Value Growth Lags Behind Global Data, Possibly Due to Enthusiasm for Altcoins
As of the end of June 2024, a total of 37 companies participated in the report, with 16 excluded (11 companies have closed, and 5 have not submitted). Among the 21 virtual asset business operators, there are 14 exchanges and 7 wallets. We can observe that the cryptocurrency market value in South Korea surged from 43.6 trillion Korean won in the second half of 2023 to 55.3 trillion Korean won in the first half of 2024, an increase of 11.7 trillion Korean won, representing an approximate growth of 27%. In comparison, the total cryptocurrency market value globally increased from 1.73 trillion USD in the second half of 2023 to 2.41 trillion USD in the first half of 2024, an increase of 680 billion USD, or about 39%. This indicates that the overall performance of the South Korean market during this period is slightly lagging behind global developments, possibly due to the South Korean market’s inclination towards small-cap competitive coins rather than the stronger mainstream coins in the past six months.
Furthermore, the number of listed digital assets in the South Korean market declined from 1,333 to 1,207, a decrease of approximately 9.5%. Even excluding coins listed on multiple exchanges, this figure still reaches 7.7%. This data corroborates our previous reports that the South Korean market experiences a very high turnover rate. 54% of coins do not last beyond two years, with half of those failing to last even one year. (Korea Financial Supervisory Service: 20% of coins in the South Korean market do not last a year, revealing the liquidity behind the kimchi premium)
15% of South Koreans Hold Exchange Accounts, Most Have Not Seriously Invested in Cryptocurrency
Additionally, the daily trading volume in the South Korean market increased from 3.6 trillion Korean won in the second half of last year to 6 trillion Korean won, an increase of about 67%. Along with the surge in trading volume, the total profit and loss amount also doubled, rising from 287 billion Korean won to 590 billion Korean won. The number of users increased from 6.45 million last year to 7.78 million, a rise of 21%. If calculated against South Korea’s total population of 50 million, approximately 15% of the population has registered on exchanges. However, as previously mentioned, the top 1% of users account for 70% of the overall market. We can see that the number of users holding less than 1 million Korean won increased from 4.55 million to 5.67 million, with the proportion slightly rising from 70% to 72%. (Top 1% of accounts in South Korea account for 70% of total market investment, unveiling the mystery behind the kimchi premium)
Furthermore, the Financial Services Commission has warned that the price volatility of digital assets stands at 70%, an increase of 8 percentage points from the second half of 2023, which is particularly noteworthy. Additionally, the significant reduction in anti-money laundering personnel and the bankruptcy of exchanges are also matters that investors should pay attention to
