South Korean crypto exchange volumes surpass those of its entire stock market

Bitcoin DeFi project Badger DAO diversifies its $21 million treasury

The country is one of the biggest markets for crypto in the world and is known for its ‘Kimchi Premium.’

The month it went ballistic

South Korean crypto exchanges are now processing more volumes each day compared to traditional stock exchanges, a report on local publication Hankyung said Monday.

The country is one of the most speculative crypto markets in the world that attracts a young, risk-averse crowd. It is even home to the infamous “Kimchi Premium”—a local phenomenon where spot crypto can trade at a premium of as high as 50% compared to other (international) crypto exchanges.

For now, while the prices are in line with international quotes, the local volumes for cryptocurrencies are off the charts. 

Reports said that the average volumes on crypto exchanges like UpBit, Bithumb, and Kobit crossed over 16 trillion won (nearly $14 billion) on average. This amount was higher than the average daily trading volume on the Korea Composite Stock Price Index (KOSPI)—a representative index of Korean companies—a March, a figure of just $9 billion.

Bitcoin’s recent price surge to over $60,000 was attributed as one of the key drivers behind the high retail trading interest. The crypto market as a whole gained billions of dollars in 2021 and is now valued at over $1.1 trillion, with niche sectors like DeFi and NFTs leading in speculative gains.

Why the crypto frenzy?

The report said that Korean investors are likely seeking high risk, high reward plays that could give them higher yields on capital in a short period, compared to low-yields offered by banks and traditional financial institutions.

It added that local interest in traditional “stock market funds” or other market-tracking indices was showing a steady decline.

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A display showing crypto prices in Seoul, Korea. (Source: WSJ)

Data from the country’s Financial Investment Association and the Financial Services Commission, the report said, showed that fund inflows decreased by more from 74 trillion won in January 2021 to 63 trillion won at the end of last month—a difference of over 10 trillion won (nearly $8.8 billion). The same period showed higher-than-usual inflows for crypto exchanges.

Data further showed that over 445 trillion won ($392 billion) worth of cryptocurrencies was already traded on local exchanges in the first two months of 2021—an amount bigger than the entire trading volume in the last year (356 trillion won, or $314 billion).

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