South Korean Investors Flock to Altcoins, Leaving Bitcoin and Ethereum Behind

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In South Korea, crypto investors are showing a strong preference for altcoins over major cryptocurrencies like Bitcoin and Ethereum. They are attracted to altcoins, especially Tron, due to their potential for higher profits despite the higher risks involved.

South Korean Traders Favor Altcoins Over Majors Cryptocurrency 

A report from DeSpread Research highlights the findings of a survey conducted by the Korea Financial Intelligence Unit (KoFIU). It predicts that around 6 million people in South Korea will become crypto investors by the first half of 2023. That’s a significant number, representing more than 10% of the entire population in South Korea.

However, a significant portion of these investors is using centralised exchanges for their crypto transactions, indicating the substantial influence of these exchanges on South Korea’s crypto market.

Tron Takes the Lead in South Korean Crypto Market

Meanwhile, the report from DeSpread Research underlines that South Korean traders exhibit a strong enthusiasm for altcoins, particularly those with high profit potential. 

Eventually, this trend signifies that major cryptocurrencies like Bitcoin, Ethereum, and Polygon have relatively low trading volumes on South Korean exchanges compared to global trends.

South Korea showcases unique regional disparities when it comes to blockchain networks. Tron’s network, offering lower transaction fees, dominates the country’s transaction preferences. This choice reflects specific investor preferences and strategies within the South Korean market.

Local Exchanges Outpacing Global Competitors

While global centralised exchanges witnessed a decline in trading volumes since March, local South Korean exchanges like Upbit have defied the trend. Upbit, the nation’s largest exchange, has surpassed even market leader Binance in terms of trading volume by July.

Upbit dominates the South Korean crypto market, accounting for an impressive 80% of the trading volumes. Bithumb is in second place with a share of 15-20%, while Coinone and Korbit have a limited presence in the market.

This surge can be attributed, in part, to the favourable ruling in Ripple’s court case against the U.S. Securities and Exchange Commission, which led to a substantial increase in XRP’s price and trading volume. Despite the resurgence of trading volumes on South Korean exchanges, local traders continue to rely on overseas platforms for storing their digital assets. A September report from the country’s national tax service indicates that South Korean investors hold approximately $99 billion in digital assets abroad.