In recent years, South Korea's cryptocurrency market has erupted like a volcano. The latest data shows that by the end of November 2024, the number of cryptocurrency investors in South Korea has surpassed 15.59 million, accounting for over 30% of the national population, with total assets reaching 102.6 trillion won (approximately 79 billion USD), and daily trading volumes even approaching the total of the domestic stock market, astonishing all. This wave of crypto not only demonstrates the powerful allure of digital assets to the South Korean people but also deeply integrates cryptocurrencies into the Korean financial ecosystem.

"Generation Z" Crypto Boom: Leaders in the Tech Race

The younger generation in South Korea can be regarded as digital natives, with an astonishing adaptability to technology. Concepts like blockchain, NFTs, and the metaverse are no longer novel here. Koreans view cryptocurrencies as tools for wealth leaps and use them as a symbol to announce their connection with the future. Thanks to superior internet infrastructure and the widespread use of smartphones, the interest of young South Koreans in cryptocurrencies is 'explosive', with low barriers to entry, high volatility, and high-risk returns perfectly aligning with their investment preferences.

Kimchi Premium: The Unique Charm of the Korean Market

When it comes to the most distinctive phenomenon in the South Korean crypto market, the 'kimchi premium' is unmatched. This phenomenon refers to the fact that the price of the same cryptocurrency on South Korean exchanges is generally higher than the international market price. The reason lies in South Korea's strict capital controls, which make cross-border capital flow difficult, leading to supply-demand imbalances that drive up cryptocurrency prices. This price difference injects arbitrage opportunities into the market, attracting many investors to flock in. For ordinary investors, the 'kimchi premium' is not just a price difference but also a psychological cue that fuels the market's enthusiastic atmosphere.

"Listing Immediately Soars": The Temptation of Wealth

Another major phenomenon in the South Korean crypto market is 'listing immediately soars'. Whenever a new coin is listed on a major exchange, its price often sees a sharp rise. This phenomenon stems from investors' trust in top exchanges, who generally believe that only quality projects can enter South Korea's mainstream exchanges—such as Upbit. As the largest crypto exchange in South Korea, Upbit usually occupies half of the domestic market and often ranks among the top three in global trading volume. Whenever Upbit lists a new coin, market sentiment is quickly ignited, and investors rush in.

Policy Support: From Chaos to Regulation

To ensure the healthy development of the market, the South Korean government has not taken the crypto market lightly. In 2023, South Korea passed the (Virtual Asset User Protection Act), which will officially take effect in 2024. The new regulations are seen as a 'stabilizing force' in the crypto market, greatly increasing market transparency and protecting investors' rights. Core provisions include independent management of user funds, mandatory cold wallets, and strict crackdown on market manipulation. This legislation brings compliance to the market but also pressures small and medium-sized exchanges and startup projects.

Who is controlling the South Korean crypto market?

In the South Korean crypto market, Upbit and Bithumb are undoubtedly the most influential exchanges. Together, they account for nearly 96% of the market share, with Upbit frequently ranking at the top of global trading volume lists. Upbit is known for its strong technical background and strict compliance management, while Bithumb maintains its market leadership due to early positioning and a large user base. Additionally, South Korea's blockchain startups play an important role in the market, such as Kaia, formed by the merger of Kakao and Naver, and Delabs, incubated by the well-known Korean gaming company 4:33 Games, which are driving the deep integration of blockchain with gaming and other fields.

The Future: Opportunities and Challenges Coexist

Despite the vibrant South Korean crypto market, the future remains uncertain. New regulations have improved market security, but they may also lead to excessive market concentration. Some small exchanges and startup projects may be forced to exit due to compliance pressures. However, this does not mean the end of innovation. A strict regulatory environment will compel companies to focus more on technological innovation to stand out in fierce market competition. The government needs to find a balance between regulation and innovation to ensure it does not lose its leading position in the global crypto market.

As a technology-driven country, South Korea is expected to occupy a more important position in the global crypto field in the future. As long as the best balance can be found between policy and market, South Korea's blockchain industry will usher in new highlights in the coming years.

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