South Korea's Presidential Candidates Push for Bitcoin ETF Legalization

South Korea is on the verge of a significant shift in its approach to digital assets, with leading presidential candidates expressing strong support for legalizing spot Bitcoin exchange-traded funds (ETFs). This potential policy change could align South Korea more closely with global trends and mark a major turning point for its crypto regulatory landscape. Currently, institutional investment in cryptocurrencies is banned in the country, with all trading volume coming from retail participants.

Democratic Party leader Lee Jae-myung pledged to legalize spot crypto ETFs, reduce transaction fees, and create a safer investment environment. The goal is to help the younger generation accumulate assets and plan for the future. However, experts caution that past political promises have fallen short, and actual implementation will depend on various factors including market conditions and investor sentiment.

Regulatory experts advise caution, noting that while the candidates' pro-crypto rhetoric is encouraging, historical precedent makes it difficult to predict actual progress. Anndy Lian, a blockchain adviser, pointed out that even if policy changes do occur, the success of any future Bitcoin ETFs will depend on a variety of factors. A pro-crypto president could help drive reform and potentially bring South Korea in line with jurisdictions where Bitcoin ETFs have attracted significant interest.

The Financial Services Commission’s recent tone also hints at a more open stance toward crypto regulation, which could support this shift. However, the experience of other regions, which launched their own batch of Bitcoin and Ethereum-based ETFs to lukewarm market reception, serves as a reminder that regulatory approval does not necessarily guarantee investor enthusiasm or success.

Meanwhile, corporate interest in Bitcoin is rising globally. Michael Saylor’s Strategy, the world’s largest corporate holder of Bitcoin, could become the leading publicly traded company in the future. The company currently holds around 568,840 Bitcoin, with a value of approximately $59 billion. According to Strategy analyst Jeff Walton, no other company holds as much “pristine collateral” as Strategy, and its Bitcoin position puts it in a league of its own.

Saylor, the company's co-founder and Executive Chairman, predicted that Strategy could evolve from a $100 billion enterprise into a $10 trillion one. He also forecasted that Bitcoin could hit $1 million per coin in the next decade, and as much as $13 million by 2045. Although such an outcome would be very painful for equity holders, Saylor said the company’s structure ensures other stakeholders will still be protected.

Bitcoin’s changing relationship with US equities is fueling debate about its potential as a global safe-haven asset. According to new research, Bitcoin recently showed a strong negative correlation with the US stock market when looking at short-term trends. However, this relationship weakens over longer periods, suggesting that Bitcoin does not consistently behave as a hedge against equities.

The study suggests that to qualify as a reliable safe-haven asset, an asset must show a sustained negative correlation with equities below -0.3. Bitcoin’s failure to meet this threshold implies that it cannot yet serve as a dependable counterbalance during periods of financial stress. Despite this, the researchers still argue that Bitcoin holds value as a portfolio diversifier. Its tendency to move independently from traditional assets can help investors achieve better risk-adjusted returns, particularly when stocks are underperforming.

Bitcoin’s weekly volatility reached a 563-day low on April 30, and fell below the realized volatility of both the S&P 500 and Nasdaq 100. This reinforces the view that Bitcoin is beginning to resemble a more stable and serious financial asset.