According to the Korea Financial Intelligence Unit (KOFIU), South Korea’s cryptocurrency market has witnessed a significant rebound during the first half of this year. However, despite the growth, the market is still struggling to regain its previous value. The KOFIU, a government agency responsible for overseeing the nation’s anti-money laundering regime, reported that South Korea’s crypto market capitalization rose by 46% from January to June 2022, reaching a total valuation of 28.4 trillion won (US$21.08 billion).
The study, released on Tuesday, analyzed 26 cryptocurrency exchanges and trading firms, along with nine wallet and custody providers, totaling 35 local businesses. The research discovered an average daily trading volume of 2.9 trillion won (US$2.19 billion) in the first half of the year, which represented a slight 1.3% decrease from the latter half of 2021 when the volume reached 2.94 trillion won (US$2.17 billion).
Despite the positive uptrend, South Korea’s crypto market is still down by 48.5% compared to its value at the end of 2021, just before the onset of the bear market. At that time, the local crypto market was valued at a much higher 55.4 trillion won (US$40.9 billion). The decline raises concerns about the market’s ability to fully recover and its resilience in the face of recent industry challenges.
The KOFIU’s study revealed that 10 surveyed exchanges expressed difficulty in maintaining operations due to a lack of transaction fees. This suggests that sustaining profitability remains a significant challenge for these platforms. However, the overall recovery in market capitalization indicates positive growth for South Korea’s crypto market, giving hope to industry participants and enthusiasts.
The rebound in the first half of 2022 showcases the potential for South Korea’s crypto market to regain stability and attract further investments. As the industry continues to evolve, market players will need to find innovative solutions to address profitability concerns. With proper regulatory oversight and compliance measures, South Korea’s crypto market has the opportunity to regain its previous glory and contribute significantly to the global digital economy.
