East Asia’s crypto market surges, driven by $130B in South Korea and Hong Kong’s favorable regulations, enhancing institutional adoption.
Cryptocurrency usage in the East Asia region, especially in South Korea and Hong Kong, is on the rise. According to a recent report by Chainalysis, this growth is largely attributed to institutions seeking alternative financial channels. The two largest markets in the context of cryptocurrency made up a large proportion of global crypto usage between July 2023 and June 2024.
South Korea is among the leading beneficiaries of this upswing, experiencing about $130 billion in on-chain value during this reported period. The use of blockchain technology by various firms in South Korea has improved the credibility of cryptocurrencies and supported public confidence in digital currencies. This is due to the rising doubts about conventional financial institutions and systems, which leads investors to look for a more secure and clear route in cryptocurrencies.
Hong Kong’s Crypto Hub: New ETF Launch
Hong Kong is well positioned within the greater China area, which makes it the ideal location for advancing cryptocurrencies. While China has been increasingly hostile to cryptocurrencies, Hong Kong has established more friendly legislation to encourage cryptocurrency investment. This has made it a rising hub for cryptocurrency trading and institutional offerings.
On April 15, 2024, the Hong Kong Securities and Futures Commission (SFC) took a major step by allowing Bitcoin and Ether-based spot exchange-traded products (ETFs) for trading in the public market. This approval, expected by many, resulted in a boost in institutional BTC transfers that underlined the region’s growing significance in the global cryptocurrency market. Kevin Cui, the CEO of OSL, said that such regulatory developments have given institutions a clear roadmap for adoption that has paved the way for digital assets to become more integrated into institutional portfolios.
Transforming East Asian Cryptocurrency Trading
The flow changes of cryptocurrencies in East Asia reflect a global trend of moving towards digital assets. Hedge funds and other institutional investors are mainly using both centralized as well as decentralized services for trading. This involves trading in liquidiations that exist in decentralised exchanges which may exhibit distinct prices from other exchanges.
The large amount of funds attracted by institutional investors in East Asia is changing the nature of the market and can provide a precedent for other areas. Therefore, the roles of regulation and market dynamics in the developing markets will determine the potential development of the cryptocurrency markets in the future.