Asia’s growing cryptocurrency market is closely tied to the demand for cryptocurrencies in the region, despite recent price pullbacks, especially in Bitcoin. Hong Kong, for example, recently listed six cryptocurrency ETFs (Exchange-Traded Funds), while the Australian Securities Exchange is expected to approve its first batch of Bitcoin ETFs before the end of the year. In addition to financial products, many Asian countries are driving the growth of the cryptocurrency market through gaming and blockchain technology development.
The majority of investors in Asia are long-term cryptocurrency enthusiasts who have experienced several market cycles. Some have joined the cryptocurrency market later, from countries like South Korea to Australia, where both small traders and whales have established unique ecosystems. Bloomberg recently analyzed the investment status and trends of the cryptocurrency industry in various Asian countries.
Hong Kong: User preference for high-risk investments
Patrick Pan, the CEO of digital asset platform OSL, stated in an interview with Bloomberg that individual investors in Hong Kong prefer to use leverage in their trades and have a preference for high-risk and alternative investment products like cryptocurrencies. Pan also noted that these investors are easily influenced by social media and cryptocurrency-related Key Opinion Leaders (KOLs).
In fact, Hong Kong only opened up legal investments in cryptocurrencies for individual traders last year and has been actively establishing regulations for cryptocurrency exchanges and related companies. On April 30th of this year, Hong Kong officially listed six cryptocurrency spot ETFs for trading, with a trading volume of approximately $11 million on the first day. The Ethereum spot ETF was approved even before the United States, marking a historic milestone.
South Korea: Popularity of altcoins and blockchain games
According to Bloomberg, the South Korean won has recently replaced the US dollar as the most commonly used currency in cryptocurrency token trading in South Korea. According to data analysis platform CryptoQuant, altcoins are particularly popular among Korean investors, accounting for 80% of the trading volume on Korean exchanges.
In addition, many individual investors are enthusiastic about blockchain games that use cryptocurrencies or NFTs as asset representations. Charles Pyo, the founder of Web3 product development company AI3, stated that major game companies in South Korea, such as Nexon Games Co. and NCSoft Corp., plan to launch new “play and earn” games this year to attract more gamers into the cryptocurrency space.
Japan: Government gradually relaxing cryptocurrency industry regulations
The Japanese government is actively fostering Web3 companies and gradually relaxing regulations regarding the listing and taxation of cryptocurrencies, as well as allowing venture capital firms and other investment funds to directly hold cryptocurrencies.
Japanese financial holding company Nomura Holdings and other financial institutions are also expanding the Japanese securities tokenization market, converting corporate bonds, securitized real estate, and other financial products into tokens.
However, overall, Japanese regulations are still relatively strict. For example, mutual funds cannot hold cryptocurrencies, including Bitcoin ETFs. A cryptocurrency analyst from Nomura Holdings also pointed out that Japanese financial companies are relatively conservative in participating in activities such as “cryptocurrency custody services” because they want to distance themselves from anything that has not been “clearly” approved by regulatory authorities.
Deloitte, an accounting firm in Japan, remains optimistic about the development of the cryptocurrency field in Japan. Analyst Jia Siyu believes that Japan’s gradually improving legal policies, such as the Stablecoin Bill, and its rich gaming and entertainment IP, have paved a clear path for the development of the cryptocurrency industry in Japan, and a breakthrough is imminent.
Australia: User preference for Ethereum over Bitcoin
Individual investors in Australia have a special affinity for Ethereum, according to Bloomberg. Some people even choose to invest solely in Ethereum and other cryptocurrencies instead of Bitcoin. According to a survey by cryptocurrency exchange Kraken, Australian users’ cryptocurrency wallets hold an average of 59.4% Ethereum and 17.7% Bitcoin, showing a significant disparity compared to the global ratio.
An Australian trader interviewed by Bloomberg explained that they prefer Ethereum because its price increase has been less than Bitcoin’s, making it more stable. Additionally, many altcoins are deployed on the Ethereum blockchain, making its ecosystem richer.
Sources:
CoinDesk, Bloomberg, CNBC