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South Korea’s crypto-sector has been rapidly expanding recently, with new entrants entering the business ecosystem on a daily basis. Indeed, Bitcoin’s soaring price has prompted a related increase in the amount of virtual asset transactions in the region, with North America’s increasingly growing appetite for BTC positively influencing the South Korean sector.
Furthermore, the’money transfer’ phenomena, in which investors seek high-yielding investment destinations, has led to the recent surge in growth.
According to Ki-Young Ju, CEO of CryptoQuant, for instance, the number of people betting on leverage has increased since February. He pointed out,
“$BTC market is in the greedy stage.”
With virtual asset trades exploding in South Korea recently, stock market funds have also experienced a drop. In reality, South Korean Bitcoin exchanges recently recorded higher trading volumes than their stock market counterparts.
Domestic cryptocurrency transactions, on 14 April 2021, exceeded 16.7 trillion won while the KOSPI stock exchange barely managed to touch the 16.4 trillion won-mark.
Further, according to reports from the Financial Investment Association and the Financial Services Commission,
“Investor deposits decreased by more than 10 trillion won and the transaction amount of domestic virtual assets has already exceeded the cumulative transaction amount of last year.”
Despite an increase in demand, the study highlighted how the domestic virtual asset market’s dominance has declined as compared to 2017, when BTC fever was at its peak. Domestic South Korean sales accounted for more than half of global retail transactions at the moment, relative to today’s mere 9%.
According to a new survey of 35 virtual currency experts from KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup Bank, the present market is overheated. According to the poll, the majority of bank analysts believe that the price of Bitcoin will climb to 100 million won this year. However, many people say that the price will not rise any more than it is now.
More than two-thirds of bankers believed that VCs could replace gold, but they were split on whether they could replace standard fiat currency.
The existing South Korean crypto-market is gradually becoming more regulator-friendly, with new amendments being added and the system being much tighter.
Democratic Party lawmaker Lee Jeong-moon, for example, emphasised how the scheme is falling behind and is unable to keep up with the growing market size.
“The digital financial market using new technology is expanding, and the value and market size of virtual assets such as Bitcoin are growing rapidly worldwide, and the system to support this is not keeping up with the pace.”
To foster authorized transactions, he added,
“We will do our best to protect domestic investors by supplementing the regulatory gap to prevent criminal convicts of cryptocurrency-related crimes from entering the markets.”