Cryptocurrency transaction rates in South Korea have surged past the transaction rate for the national stock exchange, according to local news outlet Hankyung.
Per Hankyung, yesterday’s total amount of transactions combined for the four major crypto exchanges in Korea—Upbit, Bithumb, Coinone, and Kobit—was $14.6 billion.
That figure exceeded the average daily transaction amount of the KOSPI Index, a capitalization-weighted index of common shares on the Korean Exchange, and KOSDAQ—the Korean Securities Dealers Automated Quotations—which has about 1,000 small to medium-sized startups listed on it, and is considered much more risky than the Kospi Index.
The combined KOSPI and KOSDAQ figures were approximately $14.5 billion and $10 billion respectively.
What caused the surge?
There are several explanations for why the crypto market saw a higher level of transactions than Korea’s national stock exchange.
The most obvious explanation was that this transaction surge occurred during Bitcoin’s most recent all-time high of $61,683. From the start of the COVID-19 pandemic to October 2020, the US Federal Reserve printed about 20% of all US dollars in circulation, placing inflationary pressure on the currency. In response, many have turned to as a convincing hedge against inflation, pushing into uncharted territory and generating high levels of transactions on exchanges.
The Hankyung report also credits the rising demand for institutional Bitcoin investment through companies like —whose assets under management now exceed $44 billion—and other industry developments like now being established in Canada.
But regardless of what happens in North America, the conditions for a surge like this have been present in South Korea itself. A government stimulus package of last year revealed the government was focused on a “digital new deal” aimed at extracting value from upcoming technologies, including blockchain.
What’s more, in January of this year, the “Kimchi Premium,”—a phenomenon that describes higher prices on Korean exchanges—suggested that investor sentiment for Bitcoin was already on the rise.