South Korea’sĀ Financial Intelligence Unit recently released data with respect to virtual assets. Most numbers remained deflated, owing to the rising interest rates, the war in Ukraine, the drop in investors’ trust in Crypto post the Terra debacle, and liquidity crunches noted within the ecosystem.
The country’s crypto market was reportedly valued at 23 trillion won (approximately $16 billion) in H1 2022. The same represented a rough 60% dip when compared to H2 2021’s 32.2 trillion won.
The report also brought to light that daily trading volume slashed down by more than half in the first six months of this year, relative to the average of 5.3 trillion won (approximately $3.7 billion) in the last six months of 2021.
As a result, the total operating profit of crypto and virtual asset service providers in South Korea fell by around 61.5%, from 1.64 trillion won (approximately $1 billion) to 0.63 trillion won (approximately $440 million).
Are Koreans sharing a good equation with Bitcoin?
Leaving aside H1’s performance, the current investor sentiment in South Korea also seems to be unappealing. The state of Bitcoin’s Kimchi Premium Index brought to light the same. This index, as such, points toward the price gap between South Korean exchanges and other exchanges around the world.
Conventionally, a rising number indicates the presence of buying bias. In such a scenario, Korean market participants usually shell out more than usual funds to acquire Bitcoin.
The current scene is quite the opposite at the moment, for the reading of this index has been on the fall. In just over the past 5 days, Bitcoin’s Kimchi Premium Index has dropped from 3.31 to 0.85, indicating that Koreans are not necessarily interested in accumulating Bitcoin at this stage.
Well, Korean investors cannot be solely blamed. The broader trend remains to be quite similar. As highlighted in an article yesterday, Bitcoin’s exchange outflow volume was hovering around its 23-month low a day back, indicating that the market does not necessarily have enough buying momentum at this stage.
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In fact, another recent tweet from Santiment revealed that Bitcoin whales HODLing 100 to 10k BTC have been reducing their supply over the past 11 months. The same now stands at a 29-month low level.
So, at this stage, it seems like Korean investors are just sailing in the same boat, and feasibly when the macro conditions improve, the state of the metrics will enhance parallelly. Furthermore, despite the current trends, it should be noted that the number of know-your-customer registered users in South Korea saw a 24% increase in H1 this year, rising from 5.58 million to 6.9 million, indicating that there’s light at the end of the tunnel.