South Korea’s crypto market remains one of the most important globally drawing attention from investors. But how big is the South Korean crypto market? Digging into local market secrets.
As of 2021, Korea reached $9.4 billion in daily transactions and the combined operating profit came to $2.8 billion. In September 2021, South Korea had one of the largest Bitcoin trading volumes in the world.
As the world stepped into 2022, Korea introduced crypto license regulations that wiped out the majority of the medium and small exchanges in the country, banning transactions from private wallets and flagging transactions above a certain amount along with the crypto market collapse, the market saw a significant decrease in crypto trading volume.
On March 20, the KoFIU (Korea Financial Intelligence Unit) revealed that the global crypto market capitalization of virtual assets was approximately about 1,010 trillion KRW ($770,710), down 10% from the end of June 2022 ($852,401) as of the end of December 2022. The market capitalization of digital assets in the domestic market was about 19 trillion KRW ($14.5 million).
Despite the downturn in the second half of 2022, Korea remains one of the biggest and most active crypto markets in the world. But how big does South Korea play in the global market?
Grasping the current status of the local digital asset market through the <The digital asset market survey results for the second half of 2022> by South Korea Financial Intelligence Unit.
<Digital asset market survey> by KoFIU?
The Korea Financial Intelligence Unit (KoFIU) semiannually holds a survey in order to analyze the crypto market scope, investment trends, and the current state of the domestic market.
This time, a survey covered 2022 Q3&4 considering 36 crypto businesses including 27 representative crypto service providers.
Crypto market cap in the second half of 2022?
Trading volume
Decrease by 43%
In the second half of 2022, the total trading volume of 27 traders was 545 trillion won ($416.7 billion), while the average daily transaction amount is 3 trillion won ($2.2 billion).
Total transaction amount of 951 trillion won ($727 billion) in the first half of 2022, while the average daily transaction amount of 5.3 trillion won ($4 billion) resulted in a decrease of up to 43%.
The trend of the monthly transaction amount in the second half of the year remains downward and in November temporary increase in transactions due to the FTX bankruptcy case.
Revenue of Korean crypto exchanges
Revenue: KRW 578.8 billion ($442million) (KRW 427.2 billion ($326 million) down from KRW 22.0 billion ($16,8 million) (42%))
Operating income was accumulated KRW 127.4 billion (KRW 49.8 billion down from KRW 22.0 billion (80%))
KRW deposits
Customer-held KRW deposits, which are standby trading funds, continue to decline reaching a total of KRW 3.6 trillion ($2.753 billion) at the end of ’22, about KRW 2.3 trillion ($1.7 billion) from the end of June 2022.
Overall the KRW deposits are down by △38% from the end of December 2022.
Cryptocurrency listings
Cryptocurrencies in circulation: 1,362 (down by 0.7%)New listings: 625 (down by 2.0%)
As of December 2022, there were 1,362 cryptocurrencies (including new listings) traded in Korea which is down by 0.7% from the end of June 2022 (1,371).Currently, there are 625 types of domestic distributed crypto assets, excluding new listings, circulated. The number is decreased by 13 types since the end of June 2022.
Interestingly, the list of top 10 cryptocurrencies by market capitalization in global actively trading in Korea looks as follows.
- BTC (20.6%)
- XRP (16.7%)
- ETH (12.4%)
- DOGE (4.1%)
6. ADA (2.0%)
Cryptocurrency traders overview
Registered Users: 11.7m (20% of the total population in Korea)Active Users: 6.2m (10% of total)
The number of accounts registered with crypto businesses was 11.78* million. This is a decrease of 1.32 million from the first half of the year.
*The number includes duplicate user accounts meaning that 1 user is likely to have more than 2 accounts.
Individual trader analytics
76% of users hold less than $0~$1k in crypto. 69% of users (4.35 million) held less than $1k~$10k. There were 25,000 users holding over $100k, accounting for 0.4% of the total, and 6% of users holding more than $10k~$100k.
The number of accounts that automatically withdrew due to prolonged dormancy increased. Among the 6.27 million individual customers (accounts) who used real-world virtual assets, men in their 30s were the most common. 1.33 million men in their 30s traded crypto. This was followed by men in their 40s (1.2 million). Among men and women, users in their 30s accounted for 30%, followed by those in their 40s (28%), 20s (21%), 50s (16%), and 60s (5%).
South Korean crypto market outlook
Negative events in the traditional and digital asset markets challenged the global financial market, including Korea resulting in the overall market downturn. Experts, however, claim the promising future of the local blockchain industry.
With the introduction of STO guidelines, the crypto market is gathering interest in the STO business from local securities firms as it has the potential to generate new revenue streams.
Furthermore, the implementation of taxes on digital assets has been delayed. The National Assembly has postponed the commencement of taxes on digital assets until 2025, despite the original plan to start them from January 1st. The Finance Ministry has stated that the protection of investors in the digital assets market should take precedence over taxation.
With that being said, despite the fact of continuous industry collapses, the majority of Korean the population and companies showing a growing interest in the crypto industry which, indeed, will result in a crypto hub formation.
Summary
✅ Total trading volume for 2022 Q2: $416.7B
✅ Average daily trading volume: $2.2B
✅ Active users: 6.2m (10% of the total user’s population)
✅ Most popular age group: men in their 30s
✅ 76% of users have less than $1,000
✅ Top 3 global cryptocurrencies trading in Korea: BTC, XRP, ETH (49.7%)