South Korea's Crypto Frenzy Fuels Global Bitcoin Surge to $66K

South Korea's crypto trading frenzy contributes to global price records, with regulatory changes ahead amid a market rally.

By Athena Xu

5/15, 17:45 EDT
Bitcoin / U.S. dollar

Key Takeaway

  • South Korea's crypto trading surged ahead of the global boom, with a 24% increase in daily trading volume to $2.6 billion by end of 2023.
  • The Korean won became the most traded currency for crypto globally in Q1 2024, highlighting South Korea's significant market impact.
  • New legislation, the Virtual Asset User Protection Act, will enforce stricter exchange regulations and penalties from July.

South Korea's Crypto Surge

South Korean retail investors have significantly increased their participation in local digital-asset exchanges, contributing to a global crypto boom that saw prices reaching record highs in early 2024. The Korea Financial Intelligence Unit (KOFIU) reported a rise of 390,000 active users on registered exchanges, totaling 6.45 million by the end of 2023. This surge represents more than 10% of the country's population, with 99% being individual investors, predominantly in their 30s and 40s. The daily average crypto trading volume in South Korea grew by 24% to 3.6 trillion won ($2.6 billion), while the total value of crypto held by these exchanges surged 53% to 43.6 trillion won. The South Korean won emerged as the most traded currency against crypto-assets globally in the first quarter of 2024, with Upbit, a leading exchange in the country, ranking among the top five worldwide by trading volume.

Regulatory Changes and Market Recovery

Despite the collapse of TerraUSD, a stablecoin project by South Korean Do Kwon, the country's enthusiasm for crypto remains undiminished. This is evidenced by a major political party's pledge to grant Koreans access to US Bitcoin ETFs during the parliamentary election last month. In response to the growing crypto market, South Korean regulators are set to introduce the Virtual Asset User Protection Act in July, which will impose stricter requirements on exchanges and tougher punishments for wrongdoing in the sector. This legislative move underscores the government's commitment to safeguarding investors while fostering a healthy digital asset ecosystem.

Global Crypto Rally on Inflation Data

The crypto markets experienced a significant rally following softer-than-expected U.S. inflation data for April 2024. Bitcoin (BTC) soared past $66,000, marking a more than 7% increase over the past 24 hours, while Ether (ETH) traded near $3,000 with a 4% advance. Solana (SOL) and Near Protocol (NEAR) led the gains among major cryptocurrencies, with 8% and 12% jumps, respectively. The broader market, as indicated by the CoinDesk 20 Index (CD20), was up by 6%. This rally was triggered by the April U.S. Consumer Price Index (CPI) figures showing a decrease from March, coupled with a slightly sluggish retail sales report, which alleviated investor concerns about reaccelerating inflation and a potentially overheating economy.