610,000 new investors in November

South Korea has seen a dramatic increase in cryptocurrency adoption. In fact, a new report suggests that more than 15.5 million citizens now have digital assets, representing roughly 30% of the country’s population.

As of November 2024, the number of crypto investors had increased by 610,000 compared to October amid a broader trend of increasing market participation.

South Korea’s crypto market doubles in value

This increase is closely linked to increased market activity following US President-elect Donald Trump’s pro-crypto policy announcements, which sparked optimism among investors. The latest Bank of Korea report highlighted that at the end of November, total cryptocurrency reserves in South Korea reached KRW 102.6 trillion (worth $69 billion), nearly double the 58 trillion KRW from the previous month ($39 billion).

Average crypto holdings per person also saw a significant increase, rising from 3.87 million KRW (worth $2,655) in October to 6.58 million KRW (worth $4,400) in November. This increase in investor participation is reflected in increased trading volumes, which reached a daily average of $10.2 billion in November, rivaling the combined volumes of South Korea’s major stock markets.

In a statement, MP Lim Gwang-Hyun noted:

“The volume of virtual asset transactions is rapidly increasing to a level comparable to that of the stock market. We must make comprehensive preparations at the government level to establish sound market transactions that will improve the stability of the virtual asset market and protect the rights and user interests”.

This accelerated pace of cryptocurrency adoption in South Korea has been driven by favorable market conditions as well as growing investor confidence. However, while this rapid growth presents opportunities, it also highlights the need for strong regulatory measures to safeguard investors and ensure market stability, an aspect South Korean leaders are currently struggling with.

Delays in crypto taxation

It is important to note that South Korea’s long-delayed cryptocurrency tax has been postponed yet again, and will now take effect in 2027, as announced by the Democratic Party (DP), the largest faction of the National Assembly. This is the third delay since the initiative was first introduced in 2021, with the original implementation deadline set for January 2022.

The DP announced the latest delay on December 1, after tense discussions with the People’s Power Party (PPP). The former stressed that more time was needed to build a comprehensive framework for the tax and ensure effective regulation of digital assets. Meanwhile, critics argue that small crypto traders may be negatively affected by this delay.

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