FameEX Hot Topics | South Korea and Hong Kong Lead Crypto Market Expansion in East Asia

East Asia's cryptocurrency market is experiencing significant growth, largely driven by institutional adoption in South Korea and Hong Kong, according to a report by blockchain analytics firm Chainalysis. South Korea is at the forefront, with $130 billion in on-chain value, while Hong Kong is emerging as a key hub thanks to its unique regulatory framework. These regions illustrate shifting attitudes toward digital assets, particularly as skepticism around traditional financial systems increases.

The 2024 Geography of Cryptocurrency Report from Chainalysis sheds light on the latest cryptocurrency adoption trends in East Asia, focusing on South Korea and Hong Kong. The report ranks East Asia as the sixth-largest cryptocurrency economy globally, with the region receiving more than $400 billion in on-chain value between July 2023 and June 2024. This remarkable growth is primarily driven by institutional investors and professionals who are seeking alternatives to conventional financial systems.

South Korea leads the region, accounting for around $130 billion of the total value during this period. A South Korean exchange executive noted that the corporate adoption of blockchain technology has significantly enhanced public perception of cryptocurrencies. “Mistrust in traditional financial systems has led investors to seek out cryptocurrencies as alternative assets,” the executive explained. The rising popularity of altcoins and stablecoins has also resulted in increased outflows to global exchanges, spurred by opportunities like the kimchi premium, where crypto prices in South Korea are often higher than in global markets.

Meanwhile, Hong Kong is solidifying its position as a major cryptocurrency hub, supported by its distinct regulatory environment. The report highlights increasing institutional adoption, particularly following the introduction of new regulations for virtual asset trading platforms in 2023.

On April 30, Hong Kong's Securities and Futures Commission (SFC) approved bitcoin and ether-based spot exchange-traded funds (ETFs) for public trading. In the lead-up to this launch, institutional bitcoin transfers surged, with many transactions occurring on platforms that cater to institutional clients. Both South Korea and Hong Kong are poised to play essential roles in the continued growth of the cryptocurrency market in East Asia.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.