H1 Virtual Asset Market Cap Up 27%
KRW Market Operating Profit 600 Billion Won
Coin Market Records 10 Billion Won Loss
Amid issues such as the launch of a Bitcoin spot Exchange-Traded Fund (ETF) in the United States in the first half of this year, the price of virtual assets continued to rise, resulting in the domestic virtual asset market capitalization increasing by 27% from the end of last year to 55.3 trillion KRW. However, as trading concentrated on the Korean won market exchanges, coin market exchanges recorded a loss of 10 billion KRW. Financial authorities recently urged 'investor caution' due to increased volatility in virtual asset prices.
The Financial Intelligence Unit (FIU) under the Financial Services Commission announced the results of the "2024 First Half Virtual Asset Service Providers Survey" on the 31st, after investigating 14 domestic exchanges and 7 wallet/custody operators.
The increase in market capitalization was influenced by rising demand following the launch of the US Bitcoin spot ETF in January and growing expectations of supply reduction due to the upcoming Bitcoin halving, leading to price increases centered on Bitcoin. As of the end of June this year, the price of Bitcoin was $62,678, up 48% from $42,265 at the end of last year.
The average daily trading volume in the first half was 6 trillion KRW, a 67% increase from the second half of last year, and exchange operating profits soared 106% to 590 billion KRW from 287 billion KRW in the second half of last year. However, compared to the 68% increase in average daily trading volume on the Korean won market to 6 trillion KRW, coin market trading fell 80% to 800 million KRW from the second half of last year. Operating profits also showed a contrast, with the Korean won market recording 600 billion KRW, while the coin market posted a loss of 10 billion KRW.
Due to the closure of coin market operators, the total number of virtual assets traded domestically decreased by 8% from the end of last year to 554. New virtual asset listings in the first half totaled 157, a 7% decrease from the second half of last year, while trading suspensions (delistings) decreased by 51% to 67.
The number of virtual assets exclusively listed on a single domestic exchange was 285, down 14%. Among these, domestic virtual assets ('Kimchi coins') issued by Koreans or traded over 80% on domestic operators numbered 102, a 23% decrease from the end of last year.
The price volatility of virtual assets (price drop rate from peak) was 70%, up 8 percentage points from the end of last year. This is a much larger fluctuation compared to the stock market during the same period (KOSPI 14%, KOSDAQ 15%).
The amount of virtual assets transferred by trading operators reached 74.8 trillion KRW, a 96% surge from the second half of last year. Of this, transfers of 1 million KRW or more per transaction to pre-registered overseas operators or personal wallet addresses accounted for 54.8 trillion KRW, representing 73% of the total. Transfers to domestic registered operators (subject to the Travel Rule) amounted to 18.7 trillion KRW, or 25%.
The FIU explained, "The proportion of transfers to overseas operators and personal wallets has increased compared to the end of last year," and "It is presumed that virtual assets are being transferred overseas for arbitrage trading and other purposes."
The number of users able to trade reached 7.78 million as of the end of June, a 21% increase from the end of last year. As in the second half of last year, those in their 30s accounted for the largest share at 29%, followed by those in their 40s (28%), under 20s (19%), 50s (18%), and 60s and above (6%). The majority of users, 67%, held less than 500,000 KRW. The proportion of users holding assets of 10 million KRW or more was 10% (780,000 people), a 0.2 percentage point decrease from the end of last year.
The FIU urged, "Volatility in virtual asset prices has increased compared to last year," and emphasized that "investors need to make careful investment decisions."
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