Categories: Crypto News
| Published On Aug 2, 2017 3:04 pm CEST  |  Updated on May 2, 2021 2:17 pm CEST | By iGaming Team

Why South Koreans have gone crazy over Ethereum?

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As a trader and adviser on Bitcoin Seoul, Bobby Kim warns his subscribers and followers to stop buying or selling Bitcoins. He frantically posts, “It’s not safe right now. I gotta tell everybody to get out of the market,” on his Twitter account and Navar Band chat rooms about the looming downturn of Bitcoin. Kim says that it becomes increasingly tricky to read the market, when the banks swoop in to buy big on the dip. Surprisingly, the market dropped 10% before rebounding, later that day on July 25.

Now, investing in digital currencies is more like a roller coaster, and South Koreans seem to be riding that thrill efficiently. Moreover, even the government and major banks are in on the action. South Korea is the third-largest market in the world. And, due to the growing demand from Asia, the price of Bitcoin is skyrocketing. “When things start going to the moon, Koreans buy more than everyone else. It’s a much more extreme fluctuation,” Kim adds.

However, Koreans have a specific taste for Ethereum. As per local experts, Ethereum is a fever that drove the Bitcoin’s price to a 30% premium in the country, back in June. Korea is home to three of the world’s top five Ethereum exchange houses. It pushes 35-40% of the coin’s global trade. In relevance to other top 10 global exchanges that use major currencies such as dollars, Chinese yuan and Bitcoins, Ethereum could be the most concentrated per capita. The Ethereum trade through Korea is a currency used by only 50 million people in the world.

Steve Lim, CEO of Coinone, digital exchange startup, says that people are crazy over it. He says, “Grandpas and grandmas come to our office lobby and say they want to put half a billion won ($447,000).” And, when they are inquired about how they get to know about this, they say ‘I heard about you through a friend who invested a couple thousand and made a killing, and I want to do it too’. However, they have very little or no knowledge about how to use the app or email.

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Above all, this rising fever over Bitcoin and Ethereum is a result of a perfect storm of conditions. According to Lim, local investment options focus primarily on real estate and domestic stock market. However, both these markets are getting squeezed. As prices and interest rates rise, real estate overheats.

Lee Seung-gun, president of the Korea Fintech Association and CEO of Viva Republica, which makes the popular payments app Toss, says the stock market just got more cumbersome than before. He adds, since March, investing into derivatives now requires hefty individual investor certification. This includes 30 hours of training and 50 hours of stimulated transactions, which is a turn off for traders.

Now, as most gambling is illegal, with such limited opportunities to flip a buck, risk-takers are set to invest money into the digital currency market. Lee states, “They looked into other assets with high volatility and Bitcoin was the perfect one.” As a result, high-risk traders started investing their money in the Korean Bitcoin market, and it went up like crazy. And, once people saw it, they also poured their money in.

In conclusion, Lim states that while desktop internet banking is annoyingly painful, mobile transfers are instantaneous with no holding time at the bank. He concludes that with high-mobile penetration, world-leading 4G and a significant population, Korea is the perfect test bed for crypto currencies.