South Korea has made a name in the crypto world as one of the most innovative and active crypto market players who are located in the region. Bitcoin and Ethereum have been the top cryptocurrencies in the digital market, but this hasn’t convinced most South Korean investors as they opt to trade with other altcoins, including Tron.
According to a recent report, data shows that investors in the region mostly favor altcoins to majors like Bitcoin and Ethereum. South Korea has been highlighted as a hub for crypto trading and is known chiefly for tech-savvy developers, as it has secured a top rank in digital asset trading volume.
South Korean investors prefer altcoins to majors
The high number of traders and investors dealing with cryptocurrencies in South Korea has favored the nation in outperforming its rivals in the volume of their local exchanges. According to DeSpread Research, the country prefers to invest in altcoins as opposed to majors. One altcoin that’s most preferred by the nation is Tron, which has outperformed Ethereum in trading volume in the country.
According to the Korean Financial Intelligence Unit (KoFIU), crypto investors account for 10% of the region’s entire population, totaling an estimated 6 million people. Based on a survey, they reported, “The majority of these investors are primarily engaged in investment activities centered around centralized exchanges, making the influence of centralized exchanges in the Korean crypto market significant.”
Since the first quarter of this year, centralized exchanges worldwide have witnessed a decline in trading volume. This was evidenced by the major currencies’ drop in the market, including Bitcoin, which consolidated and is currently showing a market bull rally.
However, among the local exchanges in the country, Upbit, which is also the country’s largest, went against this trend and experienced a growth in trading volume, and outpaced Binance, the crypto exchange market leader, by July 2023. DeSpread commented on this and said:
Cryptocurrencies that dominate the global market, such as Bitcoin (BTC), Ethereum (ETH), and Polygon (MATIC), boast large trading volumes worldwide. However, within Upbit, their trading volume shows surprisingly low levels. This phenomenon indicates that Upbit has unique characteristics compared to the global market and reflects regional disparities in investor preferences and investment strategies.
DeSpread
Why do South Korean investors prefer Tron to Ethereum?
Among the reasons behind this development was a surge in XRP market value that also experienced an increase in trading volume. This was favored by the legal victory against the US Securities and Exchange Commission (SEC), which filed charges against Ripple Labs, XRP’s parent company.
Following the DeSpread Research, their recent report on investors favoring altcoins stated that traders in the region are big into altcoins but not fond of major currencies. The report said:
Korean exchanges had an explosive reaction to news related to Ripple. The trading volume of the four major Korean exchanges, which recorded $27 billion in June, increased to $37 billion in July, a 37% increase from the previous month.
DeSpread Research
DeSpread added, “The majority of individual investors on Upbit show strong interest in altcoins with high-profit potential and tend to accept the associated high risks. This is considered one of the reasons for the high proportion of altcoin trading in the Korean market.”
Among the reasons why South Korea favors the Tron altcoin is because of lower transaction fees. Additionally, the growing ecosystem in altcoins supporting decentralized applications (dApps) has contributed to investors opting not to trade in major currencies like Ethereum.
Tron has also engaged with the South Korean trading community in forming strategic partnerships, as the network’s CEO, Justin Sun, has been noted to appear in high-profile meetings in the nation.
