South Korea's Working-Age Population Invests 14% of Portfolios in Cryptocurrencies

More than one in four working-age South Koreans are now invested in digital assets, with cryptocurrencies making up 14% of their overall financial portfolios. This significant shift in investment behavior highlights the growing acceptance and integration of digital assets into the financial strategies of a substantial portion of the South Korean population. The trend suggests that a notable segment of the working-age demographic is increasingly viewing digital assets as a viable and attractive component of their financial planning.

The investment in digital assets by a quarter of the working-age population in South Korea reflects a broader global trend where individuals are exploring alternative investment options beyond traditional financial instruments. This trend is particularly pronounced in South Korea, a region known for its technological advancements and early adoption of new technologies. The 14% allocation to cryptocurrencies within their financial portfolios indicates a level of confidence and understanding of the potential risks and rewards associated with these assets.

The growing interest in digital assets can be attributed to several factors. Firstly, the increasing digitalization of financial services has made it easier for individuals to access and trade digital assets. Secondly, the volatile nature of cryptocurrencies offers the potential for high returns, which can be appealing to investors looking to maximize their gains. Additionally, the decentralized nature of digital assets provides a level of autonomy and control that traditional financial instruments may not offer.

However, it is important to note that investing in digital assets comes with its own set of risks. The volatile nature of cryptocurrencies means that investors can experience significant fluctuations in the value of their holdings. Furthermore, the regulatory environment for digital assets is still evolving, which can add an additional layer of uncertainty for investors. Despite these risks, the significant investment in digital assets by a quarter of the working-age population in South Korea suggests that many individuals are willing to take on these challenges in pursuit of potential gains.

The trend of investing in digital assets is not limited to South Korea. Other regions around the world are also seeing an increase in the number of individuals exploring digital assets as part of their financial portfolios. This global trend highlights the growing acceptance of digital assets as a legitimate investment option and suggests that we may see continued growth in this area in the coming years. As the regulatory environment for digital assets continues to evolve, it will be important for investors to stay informed and adapt their strategies accordingly.

According to the report, 31% of crypto ownership is held by investors in their 40s, 28% in their 30s, and 25% by persons in their 50s, narrowing the age gap between crypto ownership to 22%. Most investors between 50 and 59, 78%, said they invest in crypto as a means of wealth accumulation on their side, and 53% are using it to save towards retirement. The interest is not diminishing either, as 70% of all respondents wanted to invest more in crypto. Traditional financial institutions’ role and more robust legal protection were cited as having a role in raising confidence.

Current crypto users are dominated by white-collar men in their 30s and 40s. The report, however, states that trading strategies are maturing. Frequent crypto purchases increased by 34% and medium-term activity increased by 47%. Short-term speculative trading marginally fell. Bitcoin leads, but users begin diversifying holdings. Bitcoin is still the most popular, as six out of ten investors own BTC. However, with increased experience, most are venturing into altcoins and stablecoins. NFTs and security tokens are still unpopular, as nine out of ten investors prefer to keep only coin investments.

Banking restrictions became a major problem. Seven in ten investors said they would prefer their main bank for crypto transactions if allowed to link multiple accounts. Currently, South Korea only allows one bank account per exchange, which is very strict and limits user experience and flexibility. Youth unemployment in South Korea is currently high at 6.6%, more than double the national average. The increasing cost of housing and the overall lack of wage increases are pushing young Koreans into high-risk crypto investments. This contrasts with older investors, who increasingly appreciate crypto for conducting structured savings and long-term wealth planning.

Institutional action is picking up pace. Recently, South Korea-based KB Kookmin Bank submitted 17 trademarks potentially related to a future stablecoin product, including designations such as KBKRW and KRWST. Both filings were filed with the Korea Intellectual Property Rights Information Services and cover software for virtual currency and blockchain-based systems. These trademarks are part of the bank’s wider plans to develop a national stablecoin consortium. KB is among eight big banks planning a joint venture to issue won-pegged stablecoins. The effort is coordinated with Korea Financial Telecommunications and Clearings Institute and the Open Blockchain and Decentralised Identifier Association.

Such steps correspond to the political shift with President Lee Jae-myung, whose government is likely to accelerate the institutional adoption of crypto. Although crypto was not featured in his inauguration speech, the Democratic Party Digital Asset Committee plans to push regulatory reforms and integrate crypto into the financial system. Lee will be in charge of significant crypto policies in South Korea, such as the possible implementation of the Digital Asset Basic Act (DABA). This move started with Yoon, who had campaigned on it but could not witness it to completion since he was relieved early.