Amid South Korea’s ongoing political crisis, local investors are flocking to alternative assets such as cryptocurrency trading and US shares, even as local stocks continue to fall.
Rising Crypto Trading Volume , US Shares in South Korea
According to the Korean media outlet Korea Herald, as of last Friday afternoon at 3:30 PM, the 24-hour trading volume of the top five crypto exchanges in South Korea i.e., Upbit, Bithumb, Coinone, Korbit, and Gopax was $14.59 billion. This figure is equivalent to 20.72 trillion Korean won, nearly twice the trading volume of the Kospi that day, which was 10.48 trillion Korean won.
As of today, Upbit has registered a 24-hour trading volume of $11.34 billion. Another leading crypto exchange, Bithumb, has reported a 24-hour trading volume of $3.63 billion. Korbit and Coinone recorded 24-hour trading volumes of $102 million and $317 million, respectively. According to data analytics from Messari, Gopax saw a 24-hour trading volume of $1.34 million.
Apart from this, South Korean investors are increasingly investing in U.S. shares as they lose faith in the local stock market.
While the Korea Composite Stock Price Index (Kospi) dropped to a low of under 2,400, closing at 2,360.58 on Monday, retail investors are pouring money into U.S. stocks.
Also Read: South Korea’s Political Turmoil Intensifies: Impact on Bitcoin and Crypto Industry
According to the Korea Securities Depository, local Korean investors traded shares worth $63.49 billion in the U.S. market last month. In fact, investors are also turning to Tesla shares, which have become the top choice for Korean investors, with transaction volumes reaching $7.7 billion.
Moreover, the KOSDAQ Index in South Korea plummeted 5% intraday, while the decline in the South Korean Kospi Index expanded to 2.6%, painting a stark picture of growing dissatisfaction among the general population regarding market trends.
This volatility in the stock market highlights the grave repercussions of President Yoon Suk Yeol’s unexpected declaration of martial law, following which South Korean officials in charge of the anti-corruption investigation office imposed a travel ban on President Yoon Suk Yeol.
Market analysts project that investment flows could shift further toward overseas markets.
At the same time, the value of the Korean won against the U.S. dollar plunged to 1,437 won during intraday trading and failed to recover by the end of the trading day.
Local media reports stated, “Korean investors bought U.S. shares worth $1.3 billion on Thursday, a 6.4% decline from the previous day. On Friday, purchases fell to $1.12 billion, down by 14%. Sales also plunged by 10% and 21.3% on Thursday and Friday, respectively.”
“The won-dollar exchange rate is likely to fluctuate in the 1,400-won range, considering that the political chaos is likely to continue with discussions of Yoon Suk Yeol’s impeachment,” analyst Lee Jae-man from Hana Securities said.
