South Korea: 40% of Students Invest in Cryptocurrency
According to a report from South Korean media outlet “Delighti,” a recent survey by Korea Investment & Securities (KIS) reveals that nearly half of South Korean university students are turning to cryptocurrency, viewing it as a lifeline to tackle their mounting debts and economic challenges. This unexpected trend underscores the severity of the student debt crisis, pushing young people towards innovative yet high-risk financial strategies in pursuit of economic stability and independence.
The survey highlights that 40% of the students interviewed are investing in cryptocurrencies like Bitcoin, with a primary focus on stocks listed on the New York Stock Exchange. Of these, 89% plan to diversify their portfolios soon, reflecting a lack of confidence among South Korean youth in the local stock market, with many citing greater volatility in domestic markets.
Research also indicates an increasing financial literacy among students, with a growing number starting investments early. Over half of the respondents reported starting investments in the past three years, with many committing substantial sums exceeding $7,180.
Escalating Debt and Economic Pressure: “Squid Game” Becomes Reality
In the popular TV series “Squid Game,” fictional participants face dire consequences due to massive debts, compelling them to take part in dangerous games to win substantial prizes and repay debts. In reality, young South Koreans are similarly grappling with economic pressures, resorting to extreme measures akin to the show’s characters to manage their financial responsibilities.
Economic pressures in South Korea are intensifying, particularly with rising housing and living costs, burdening many young people with heavy debts. These pressures are exacerbated under the country’s tight monetary policies. Young people often rely on educational loans to cover tuition and living expenses, with educational debt growing faster than other forms of consumer debt.
According to recent survey data, in 2021, over one-fifth of households aged 19-39 had debt-to-income ratios exceeding 300%, compared to just 8% in 2012. This figure is expected to rise further by 2024, disproportionately affecting dual-income families, households with children, and low-income groups in the Greater Seoul area, highlighting the widening socioeconomic gap in the region.
Coupled with South Korea’s severe aging population issue, many young people lack confidence in systems such as retirement services, savings accounts, and the domestic stock market. A survey in April found that over three-quarters of Koreans aged 20-39 “distrust” the state-provided retirement pension.
The Future of Cryptocurrency in South Korea
Faced with expanding debt crises, more and more young South Koreans are choosing to invest in cryptocurrency, hoping to improve their financial situations through high-risk, high-return investments, which is a primary reason for their attraction to cryptocurrencies.
The future outlook for South Korea’s cryptocurrency market appears promising yet uncertain. Despite government efforts to increase transparency and security through policy changes, the allure of high returns may continue to attract debt-laden students.
South Korea plans to launch a cryptocurrency asset management system by 2025, aimed at combating tax evasion and monitoring illegal transactions. Ongoing policy changes seek to regulate cryptocurrency exchanges, ensuring investor protection, which could impact the future popularity and feasibility of cryptocurrency as an investment option in the country.
Amidst severe economic pressures, the surge of interest among South Korean students in cryptocurrency reflects the severity of the student debt crisis. As young people explore the cryptocurrency market, emphasizing responsible investment practices and financial education will be crucial in helping them secure their financial futures amidst the evolving cryptocurrency industry.
This article was originally published on “Crypto City.”