Why is Cryptocurrency Trading Popular in South Korea?

As cryptocurrencies soared towards the end of 2020, investors paid close attention to their performance in some key markets. South Korea is one of them. In March 2020, the National Assembly of South Korea passed a new law that paves the way for the regulation and legalization of cryptocurrencies and cryptocurrency exchanges. This step was taken in recognition of the booming and growing cryptocurrency ecosystem, even amid the COVID-19 outbreak foreign exchange market today. The legislation was designed to oversee an emerging industry and develop rules for anti-money laundering procedures. South Korea has been at the forefront of the cryptocurrency markets in recent years, and the country has widely adopted crypto technology. According to a Korean study cited in Quartz, more than a third of South Korean workers invested in cryptocurrencies such as Bitcoin and Ethereum in 2017.1 In 2018, a new government initiative spearheaded the country's S-coin cryptocurrency forex trading platforms in India. And the March 2020 legislation was an attempt at hearsay dampens markets, slows the spread of blockchain, and controls price volatility for Bitcoin and other cryptocurrencies.



How Attractive are Cryptocurrencies to South Korea?

Various articles and newspaper reports have analyzed South Koreans' affinity for cryptocurrencies and developed theories about their popularity. In general, these theories can be condensed into three. The number one reason for the popularity of cryptocurrencies is the prevailing economic conditions in the country. Although South Korea's economy is quite large and prosperous, it suffers from a youth unemployment problem. According to Trading Economics, the youth unemployment rate reached 11% in June 2020 and was 8.2% in December 2020. The government unveiled a program to encourage small and medium-sized businesses to hire young workers best broker in India for forex.3 However, after the bankruptcy of Bitcoin in 2017, cryptocurrencies emerged in 2018 as a possible route to financial stability for young investors. South Koreans living in a hierarchical society. with a high cost of living and a very competitive job market. "For young Koreans, cryptocurrency seems like a rare opportunity for prosperity," said an article in the online publication The Verge. The same article quotes a journalist in his twenties who believed that investing in crypto was also a way for a largely homogeneous and well-educated workforce to stand out from his peers.

Cryptocurrency Trading is Popular in South Korea

Another reason for the popularity of cryptocurrencies is their familiarity with micropayment transactions. South Koreans have long been the first to embrace technological innovations, be it on social media or in video games. It also has the world's fastest internet speeds and a well-developed telecommunications system to facilitate mobile payment systems.5 Japan, another country where cryptocurrency trading is popular, has a similar history. The resilient gaming industry has introduced South Koreans to electronic micropayments, an idea that has yet to catch on in the West. For example, Hangame, a Korean gaming company, earned $ 30,000 a day from micropayments of 50 cents each in 2001, when online casual games were mostly free. At the end of the year, the same company earned $ 80,000 a day and had an annual turnover of $ 93 million in three years. Shops and black markets had multiplied around their games. While cryptocurrency-related businesses have yet to generate similar revenue, they could do so now that the South Korean government is enacting regulations.



The Bottom Line

A combination of political uncertainty, familiarity with micro-payment systems, and economic troubles have made cryptocurrencies an attractive option for South Korean investors. The country has always been one of the early adopters of key world-changing technologies. The country could once again lead the way by bringing cryptocurrencies to mainstream commerce.

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