Over 30% of wealthy South Koreans now view cryptocurrencies as a long-term investment strategy, outperforming gold and property. Young investors are particularly drawn to crypto, moving away from domestic stocks. The Financial Services Commission plans to introduce comprehensive crypto regulations by 2025, signifying a shift towards a more structured approach to digital assets in South Korea.
Recent data indicates that over 30% of affluent South Koreans consider cryptocurrencies a viable long-term wealth strategy, surpassing interest in traditional investments like gold or real estate. Younger investors are particularly inclined towards digital assets, as a report from Hana Bank highlights potential shifts in investment patterns due to unmet expectations from conventional financial systems. The report suggests a growing acceptance of digital assets, which may lead to the establishment of a new financial order, signalling a notable change in investment paradigms.
The trend is particularly evident among young Koreans who are increasingly distancing themselves from the domestic stock market. Interviews reveal a strong aversion to investing in the Korea Composite Stock Price Index (Kospi), with many redirecting their focus towards U.S. equities and cryptocurrencies. Data shows a decline in the participation of younger investors in the domestic market, with only 11% of those in their 20s engaged in it in 2023, down from 14.9% in 2021, while those in their 30s also saw a decline from 20.9% to 19.4%. In contrast, nearly 48% of crypto investors are from the younger age brackets.
Additionally, there has been substantial trading volume among major South Korean exchanges, totalling approximately 2.52 quadrillion won (around $1.76 trillion). Industry insiders report that cryptocurrencies, especially Bitcoin, are directing retail investments away from traditional stock markets. The CEO of CryptoQuant, Ki Young Ju, noted that Korean retail investors possess a greater appetite for risk compared to their U.S. counterparts, further spurring crypto trading activity.
The Hana Bank report does not favour specific crypto assets, but researcher Yoon Seon-young observes that the inclination of affluent individuals towards crypto indicates the sector’s emerging maturity. Despite existing regulatory gaps and a lack of comprehensive understanding concerning new technologies, informed wealthy investors are actively seeking to educate themselves about crypto before committing their funds.
In terms of regulations, the Financial Services Commission (FSC) of South Korea is preparing to implement detailed guidelines for cryptocurrencies by Q3 2025. This move will integrate crypto within the formal financial framework, allowing entities such as universities to liquidate their crypto portfolios and revisiting the concept of spot exchange-traded funds (ETFs). The FSC aims to develop best practices concerning disclosure and trading, aligning with global trends in crypto adoption.
While South Korea’s crypto market presents tremendous potential, it also faces inherent volatility. Politicians are beginning to acknowledge this duality; recently, presidential candidate Hong Joon-pyo expressed intentions to ease crypto regulations in a manner reminiscent of the deregulatory climate during Trump’s presidency, appealing to younger voters who view crypto favourably. This emerging landscape reflects a broader trend, with an estimated 30% of the South Korean population engaged in cryptocurrency trading, urging regulators, banks, and political leaders to adapt accordingly.
