Written by Jihoon Lee and Jaspreet Kalra
SEOUL/MUMBAI (Reuters) – Asian investors are driving Bitcoin's runaway rally.
According to crypto exchange data from The Block, traders in South Korea, China and other Asian countries accounted for around 70% of Bitcoin trading volume, similar to the last time Bitcoin hit this high in 2021. is in charge of
Of the $1.17 trillion worth of Bitcoin traded in February, Asian investors accounted for $791 billion, with North American investors far behind at $113 billion, according to the data. roughly mirrors the trend seen since November.
In China, FOMO is plaguing many retail investors frustrated by the poor stock market. On the popular messaging app WeChat, searches for “Bitcoin” surged 12 times in February.
“I want to buy and hold Bitcoin at a good price,” Mia Wang, a financial industry employee based in eastern China's Zhejiang province, told Reuters. “It's gone up a lot and it's expensive, and I'm worried there won't be a fix.”
Bitcoin surpassed $69,200 on Tuesday, rising by an eye-popping 160% since early October, largely due to U.S. regulators approving a spot Bitcoin exchange-traded fund (ETF) in November 2021. exceeded the highest price for the month. His iShares Bitcoin Trust at BlackRock has been a big beneficiary of these investment flows.
Traders are also rushing into the world's biggest cryptocurrency ahead of April's “halving” event, which could reduce supply and push prices higher. The supply of Bitcoin is limited to 21 million, of which 19 million tokens have already been mined.
The legality of trading and owning Bitcoin varies by jurisdiction in Asia, from Japan, which has relatively loose regulations, to China, where it is banned. Bitcoin spot ETFs are prohibited in South Korea, but local brokers can easily access Bitcoin futures ETFs.
South Korea is paying close attention to Bitcoin
Hong Sung-wook, a crypto analyst at NH Investment & Securities, estimates that South Korea holds a 10% share of the Bitcoin Cash token and listed futures market.
Koreans made a net investment of $23.4 million in the U.S.-listed 2X Bitcoin Strategy ETF this year, compared to $25.1 million in all of 2023, according to the Korea Securities Depository Center. In February, he also invested $6.89 million in the ProShares Bitcoin Strategy ETF.
“Since Bitcoin ETF trading is prohibited here, more and more Koreans are buying Bitcoin ETF futures, which is helping their popularity now,” Hong said.
According to the Korea Exchange, Bitcoin trading volume on Upbit last week nearly tripled compared to the previous week to 67,000 coins.
However, U.S.-based exchanges operating in some Asian markets, such as Coinbase, Bitstamp and Binance, still account for the largest share of global trading volume at 50%, according to research firm Kaiko.
Over the past year, Hong Kong has decriminalized crypto trading while allowing Bitcoin ATMs and stores to accommodate retail investors and offshore Chinese financial institutions.
The city's largest Bitcoin futures ETF, managed by CSOP Asset Management, has seen its assets under management increase fivefold in the past five months to more than $100 million.
There is also significant interest in India, where some local crypto exchanges operate legally, but more transactions are subject to the 1% transaction monitoring imposed by local operators. It is carried out on offshore exchanges such as Binance and KuCoin, which do not impose taxes.
According to estimates by local think tank Esya Center, from July 2022 to July 2023, Indians traded cryptocurrencies worth Rs 350,000 through offshore crypto platforms, accounting for 90% of the total crypto transactions by Indians. accounted for more than %.
(Reporting: Jaspreet Kalra, Lisa Pauline Mtuckal, Summer Zhen, Jason Xue, Cynthia Kim, Jihoon Lee; Graphics: Vineet Sachdev; Writing: Vidya Ranganathan; Editing: Pravin Char)
