Bitcoin (BTC) is trading at a premium on South Korean exchanges like Upbit, as traders seek protection from the weakening national currency, the South Korean won. The South Korean won has fallen to a 15-year low against the US dollar, prompting investors to turn to BTC as a hedge. BTC is trading at a premium of over $2,000 on Upbit compared to other exchanges, with the disparity widening.
The surge in BTC trading in South Korea comes as the Korean won markets make up just 1.78% of all BTC trading activity. With concerns about currency devaluation, more South Korean investors are turning to BTC as a safe haven asset. The recent spike in the Korean won index signals a rush to buy BTC as the currency slides against the dollar, accelerating its decline.
South Korea has seen a surge in crypto investors, with domestic investors exceeding 15 million for the first time, according to recent data from the Bank of Korea. The country has become a key crypto hub, with retail demand for crypto high among investors looking to offset stagnant incomes. The latest increase in crypto activity started in late 2024, with an additional 610K South Koreans making their first crypto purchases following the US elections and the weakening Korean won.
Top South Korean centralized exchanges like Upbit, Bithumb, Coinone, Korbit, and GOPAX have seen increased activity from local investors. These exchanges are mostly closed to international traders without a bank account in the country, limiting arbitrage opportunities. South Korea has also implemented regulations under the Virtual Asset User Protection Act to track crypto market growth more closely, with volumes on virtual asset exchanges surpassing traditional stock markets.
Inflows to South Korean exchanges have accelerated in the past year, with demand for risky assets with high potential returns growing among local traders. The country’s political stability has also come into question, prompting investors to shift their funds from shares into digital coins. The KOSDAQ index has been sliding throughout the year, further driving interest in crypto investments among South Korean investors.
Overall, the surge in BTC trading on South Korean exchanges reflects the growing interest in cryptocurrencies as a hedge against currency devaluation and economic instability. With more South Korean investors turning to BTC and other digital assets, the country’s crypto market is catching up to traditional stock markets in terms of volumes and retail activity. The trend towards crypto investments is expected to continue as investors seek alternative assets with high potential returns in a volatile economic environment.
