South Korea’s Crypto Investor Base Increased by 21% in 2024

A recent report from the Financial Intelligence Unit (FIU) reveals that South Korea’s cryptocurrency investor base has expanded to 7.78 million, reflecting a notable 21% increase from the previous year.

• This growth translates to an addition of 1.33 million new investors compared to the latter half of 2023, largely driven by a significant rise in Bitcoin's value.

Market Activity and Transaction Volume

The increase in investors coincides with a remarkable 67% rise in the average daily transaction volume within South Korea's virtual asset market, reaching a record 6 trillion won (approximately $4.3 billion).

• This volume is up from 3.6 trillion won ($2.6 billion) in the previous period.
• Additionally, the total market valuation rose by 27% to 55.3 trillion won (around $40 billion) in the first half of 2024.

Demographics of Crypto Investors

The survey indicates that male investors dominate the market, making up 68% (5.29 million) of South Korea's crypto users.

• Men in their 30s are the most active demographic, with 1.58 million participants, followed by those in their 40s and younger age groups.
• Female investors, while fewer in number, are increasingly contributing to the market growth.

Investment Patterns and Asset Holdings

Most South Korean crypto investors hold modest amounts in digital assets. Approximately 67% have investments valued at less than 500,000 won ($362).

• About 10% of investors maintain portfolios exceeding 10 million won (over $7,000).
• A small fraction, representing 1.3%, has assets worth more than 100 million won ($72,000), while high-net-worth individuals with over 1 billion won ($724,000) account for just 0.03%.

Bitcoin remains the most popular asset, favored by 37.2% of investors, followed by Ethereum (11.1%), Ripple (10.6%), Dogecoin (2.8%), and Ethereum Classic (2.7%).

Market Volatility and Future Outlook

Price volatility continues to be a defining feature of the South Korean crypto market. The report notes an increase in volatility, with the Maximum Drawdown (MDD) reaching 70%, up from 62% in the second half of last year.

• In comparison, the MDD for South Korea's main stock index, the KOSPI, was only 14% during the same timeframe.
• The FIU attributes these price movements to increased funding into U.S. spot Bitcoin exchange-traded funds (ETFs) and supportive digital asset policies from U.S. presidential candidates, advising investors to exercise caution amidst heightened fluctuations.