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Real-time charts for bitcoin and other digital currencies traded in Korea are displayed on an electronic board at crypto exchange Bithumb in Seoul's Secoho District, Thursday. Korea Times photo by Shim Hyun-chul Korea urged to endorses bitcoin ETFs to retain investors By Yi Whan-woo Retail investors in Korea appear to be optimistic about achieving higher profits after a landmark decision by the U.S. securities regulator on bitcoin exchange traded funds (ETFs), Wednesday (local time), which resulted in lowering the barrier between the traditional finance and digital asset industries. The decision allows a total of 11 ETFs that track value of bitcoin, the world’s largest cryptocurrency, on the traditional U.S. market exchanges beginning Thursday. Only available for trading on the traditional securities market, an ETF deals with a range of assets, currencies and commodities and it is the first time such a financial product will include a cryptocurrency as an underlying asset. Under the circumstances, multiple shareholders of cryptocurrency exchange operators in Seoul gained at a much steeper pace than their respective peers in the same industry, Thursday. For instance, Woori Technology Investment, which holds a 7.24 percent stake in Dunamu, the operator of Korea’s largest cryptocurrency exchange operator Upbit, surged 29.98 percent to close at 8,020 won ($6.10) on the tech-heavy Kosdaq. Another shareholder of Dunamu with a 5.95 percent stake, Hanhwa Investment & Securities, also climbed 29.99 percent to close at 4,400 won on the benchmark KOSPI. “Retail investors appear to believe that the debut of bitcoin ETFs on the U.S. stock market can increase trading volumes and values of digital coins here, as well as values of affiliated companies’ shares,” said Xangle, a Seoul-based data and information provider on digital currencies. The company pointed out that the capital market in Korea is largely influenced by that of the U.S. It then noted massive cash is anticipated to flow into the U.S. cryptocurrency market by operators of the 11 ETFs, including mainstream institutional investors such as Blackrock and Fidelity Investments, over the Securities and Exchange Commission’s decision. The market capitalization of bitcoin stood at more than $913 billion as of Wednesday, according to CoinGecko. The total net assets of the U.S. ETFs amounted to $6.5 trillion, according to the Investment Company Institute. In a separate analysis, Standard Chartered said the ETFs could draw $50 billion to $100 billion this year alone. Xangle projected the Korean financial regulator to follow the U.S. path and endorse the bitcoin ETFs, in order to ensure that investors, both in traditional finance and digital assets, do not exit Korea. “The investors otherwise will pull out their cash and invest in the U.S. markets, and such departure would lead to weakened competitiveness of brokerage houses and asset management firms here as they will lose customers,” it said. Some analysts, however, disagreed on the idea of Korea also adopting bitcoin ETFs, arguing the country has a long way to go if it wants to materialize such idea. “Korea, despite its efforts to lower business barriers, is still known for a range of regulations that hinder new businesses from growing,” an insider from a lesser-known cryptocurrency operator said, asking not to be named. The person noted even the U.S. financial regulator took nearly two years to approve the bitcoin ETFs after the idea was first brought up in 2021.
Read more: koreatimes
