According to Korean media (Herald Business), as the U.S. stock market and cryptocurrency market continue to rise after former U.S. President Donald Trump was re-elected, the so-called "Trump market" has shaken the sentiment of Korean investors. In the banking industry, demand deposits, known as "standby funds," lost 27 trillion won (about $1.9 billion) in just five months. In order to pursue investment returns, funds flowed from safe assets to risky assets, setting off a large-scale "money of funds."
A woman in her 50s surnamed Kim said in an interview: "The cryptocurrency market is so hot now. I think this is an opportunity again. I don't want to become a 'poor person' (벼락거지, Note: refers to are people who have become relatively poor due to the sharp rise in real estate and other asset prices).”
According to data from the financial sector on Wednesday, as of the end of November, the current deposit balance of South Korea's five major commercial banks was 592.669 trillion won, a decrease of more than 5 trillion won compared with the end of last month, and a decrease compared with the end of June five months ago. 26.9477 trillion won, which is also the lowest value since the end of January this year.
Factors accelerating the outflow of deposit funds include the cryptocurrency market and the U.S. stock market that continued to rise after Trump was elected. As of Wednesday morning, the price of Bitcoin reached $95,981, a gain of about 40% in November alone. The rise of Bitcoin (BTC) has also led to the recovery of altcoins. Among them, the representative altcoin Ripple (XRP) soared by more than 400% after Trump won the election, soaring from around US$0.51 to the current level. of $2.75.
A person related to the cryptocurrency exchange said that in the past, Bitcoin's bull market took a while to drive altcoins, but the characteristic of Trump's market this time is that this time has been shortened. In addition, the recent delay in the implementation of South Korea’s cryptocurrency tax has further raised investors’ expectations for future investment returns.
South Koreans in their 50s and 60s return to the currency market with their retirement savings
According to reports, under this situation, some Korean people in their 50s and 60s have begun to take advantage of the cryptocurrency bull market to seek to increase their retirement savings. They have learned from some extreme cases when crypto asset prices rose sharply in 2021, such as At that time, some people quit their jobs or bought houses after making high crypto asset gains. Recently, success stories about "an employee of a large company resigned after earning 10 billion won through cryptocurrency investment" have once again appeared on the Internet.
A 58-year-old woman surnamed Jin said in an interview: "I tried investing in Bitcoin and Dogecoin because I thought it was a pity to just keep my retirement funds in a bank account." Because she is afraid of cryptocurrency prices The market has risen and fallen sharply, so she has not invested much money, but she plans to invest gradually in the form of fixed investment.
Information obtained by South Korean Congressman Ahn Do-geol from the Financial Supervisory Service shows that as of the end of September, the number of customer accounts over the age of 60 at Upbit and Bithumb, South Korea's largest and second largest cryptocurrency exchanges, has reached 775,718 , their total cryptocurrency holdings are 6.76 trillion won (approximately $4.8 billion). The amount of investment per capita.
In addition, per capita investment among South Koreans in their 60s is approximately 8.72 million won (approximately US$6,213), the highest among all age groups. The per capita investment amount of people in their 20s and under is approximately 980,000 won (approximately US$698), that of people in their 30s is 2.98 million won (approximately US$2,123), that of people in their 40s is 5.26 million won (approximately US$3,748), and that of people in their 50s and above The average annual income is 7.72 million won (approximately US$5,501).
The growing trend of middle-aged and older investors new to the cryptocurrency market is also significant. On the Upbit and Bithumb exchanges, the number of accounts for customers over the age of 60 increased by 30.4% compared to the end of 2021 (an increase of 180,834). The number of accounts among 50-year-old customers also increased by 22.5% during the same period. Conversely, the number of accounts for customers in their 20s fell 6.4% over the same period, while those in their 30s grew just 8.3%.
A banking industry source said that the phenomenon of capital flows from banks to the cryptocurrency market and the U.S. stock market does exist, and predicted that this phenomenon may further accelerate as interest rates are lowered.
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