Korea’s Obsession with Cryptocurrencies
It is widely known that Korea has been a hotbed for cryptocurrency trading over the last few years. Many Koreans were active in investing in Bitcoin, Ethereum, etc. So why are Koreans so obsessed with cryptocurrencies? Many feel that this is their only way out of a low to a middle-class life. In order to buy an apartment in Seoul, the average deposit is around $500,000. That is crazy when you think about the fact that many Koreans work for around $30,000 a year.
Cryptocurrency actually gives Koreans a shot at becoming rich. Why? Because they have seen or heard many of their friends and family getting rich off cryptocurrency in early 2017. There have been reports that 1/3 of Korean workers have invested in digital currencies within the last two years. Most of those workers are under the age of 40. This young Korean generation either sees the potential of digital currencies or they are looking for a quick way to earn money.
Starting from 2018 cryptocurrency prices have dropped. All those that invested in cryptocurrencies are now dealing with the huge losses. Many Koreans are going to psychologists at a higher rate, divorces are up, and in some cases committing suicide. So why are young Koreans looking at cryptocurrencies as their last option? In the past five years, it has become harder for young people in Korea to find jobs. There is so much competition out there that it is hard for young Koreans to separate themselves from the pack.
Very Few Options
This is why many young Koreans are looking into cryptocurrencies. What else are they going to invest in? Most young Koreans have a couple thousand dollars to invest. Are they going to invest in real estate? Not with these sky-high real estate prices in Seoul. Put it in a saving account? The interest rates are a joke in Korea. In reality, cryptocurrencies really are their only option.
Korea is the prime country for cryptocurrency trading. Koreans spend hours on their mobile phones and every home in Korea has high-speed internet access. Globally speaking Korea might be #1 when it comes to smartphone use. This lead to cryptocurrencies costing 50% more than the global market. This was called the “kimchi premium” which brought many global traders into Korea to capitalize on this albatross. However, this was the past. Presently the cryptocurrency space in Korea is depressing. Prices continue to go down for all cryptocurrencies.
The causes of the fall of cryptocurrency can be from government regulations. China has outright banned cryptocurrency trading and Korea banned ICOs. With all these regulations the fall of cryptocurrencies has continued until now. Many young Koreans have lost their life savings. They will need to start over again but is there really another option? The Korean government should not focus on restricting this new technology but helping these young Korean entrepreneurs to use this technology to create something innovative and beneficial to society.