Asian traders give Bitcoin boom from Reuters

By Jihoon Lee and Jaspreet Kalra

SEOUL/MUMBAI (Reuters) – The rapid rally is being driven by investors in Asia.

According to crypto exchange data from The Block, traders in South Korea, China and other Asian countries account for about 70% of Bitcoin trading volume, similar to 2021, the last time Bitcoin reached such heady highs.

Asia accounted for $791 billion of the $1.17 trillion worth of Bitcoins traded in February, while North American investors lagged far behind with $113 billion, broadly reflecting a trend observed since November, as the Show data.

In China, FOMO has hit many retail investors frustrated with an anemic stock market. On the popular messaging app WeChat, searches for “bitcoin” increased 12-fold in February.

“I want to buy Bitcoin at a good price and hold it,” Mia Wang, a financial industry worker in eastern China’s Zhejiang province, told Reuters. “It has risen sharply and is now expensive, but I’m worried there won’t be a correction.”

Bitcoin is trading at around $65,000 – close to its record high of $69,000 – after a stunning 148% rise since early October, largely due to U.S. regulators blocking spot Bitcoin exchange-traded funds (ETFs ) to permit. BlackRock’s (NYSE:) iShares Bitcoin Trust has been a big beneficiary of these investment flows.

Ahead of April’s “halving,” traders also flocked to the world’s largest cryptocurrency, which could reduce supply and drive up prices. 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 across Asian jurisdictions, ranging from Japan, where relatively liberal regulations apply, to China, where there is a ban. Spot Bitcoin ETFs are banned in South Korea, but local brokers offer easy access to Bitcoin futures ETFs.

KOREA relies on Bitcoin

Hong Song-uk, a cryptocurrency analyst at NH Investment & Securities, estimates that South Korea has a 10% share of Bitcoin Cash tokens and listed futures markets.

According to the Korea Securities Depository, South Koreans have 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. Invested in February She also invested $6.89 million in the Proshares Bitcoin Strategy ETF.

“Since Bitcoin ETF trading has been banned here, more and more Koreans are buying Bitcoin ETF futures, which is now contributing to its upswing,” Hong said.

Bitcoin trading volume on Upbit last week roughly tripled compared to the previous week, reaching 67,000 coins, the South Korean exchange said.

However, US-based exchanges such as Coinbase (NASDAQ:), Bitstamp and Binance, which operate in some Asian markets, continue to account for the largest share of global volume at 50%, according to research firm Kaiko.

Hong Kong decriminalized crypto trading last year while allowing Bitcoin ATMs and shops to appeal to retail investors and even Chinese offshore financial institutions.

Assets under management of the city’s largest Bitcoin futures ETF, managed by CSOP Asset Management, have increased fivefold in the last five months to over $100 million.

There is also a lot of interest in India, where several local crypto exchanges operate legally, but trading occurs more on offshore exchanges such as Binance and KuCoin, which do not charge the 1% transaction monitoring tax that local operators charge.

Between July 2022 and July 2023, Indians traded cryptocurrencies worth Rs 350,000 crore through offshore crypto platforms, accounting for more than 90% of Indians’ total crypto trading volume, according to estimates by Esya Centre, a local think tank.