Why More and More Koreans are Holding on to Bitcoin

The truth is that most Koreans do not understand Bitcoin mainly because most are not explaining it correctly. This is a good thing. The general explanation of Bitcoin is that it is the future of money, a payment mechanism unlike any other. However, the truth is that Bitcoin is more like a store of value. Most Koreans are not buying bitcoin to use it for payments. A vast majority of Koreans are holding on to Bitcoin simply as an investment. So in a way, Koreans are doing the right thing and looking at Bitcoin for what it is.

Koreans are Prepared to Lose it All

Koreans and Bitcoin

Koreans are natural risk takers. They are always looking for the next big thing. They know what it feels like to fail and lose it all. Koreans are not concerned about what Bitcoin’s price is today or tomorrow. They are counting on the future. Now there were the few traders that made a killing with the Kimchi Premium but in general, most Koreans hold Bitcoin for the long term.

The Success of Bitcoin

Since Bitcoin has been created in 2009, it has outperformed every currency, even with governments hostile to it. So it is amazing the valuation it has today with most banks and governments around the world looking to try and kill it. The Korean government is no different. If it was up to them they would get rid of Bitcoin in a heartbeat.

A Way for the Average Korean to get out of the Middle Class

In Korea, it is very difficult for the average salaryman to get to the upper class. So much wealth in Korea is concentrated because only a small number of people have access to a cost of capital that’s so much cheaper than anyone else. The rich in Korea can basically win every bid on an asset that they’re interested in buying. Therefore there is no competition for buying the best assets and that is a product of Korea’s current financial system.

So how can the average Korean worker accumulate wealth?

This is why the cryptocurrencies are so popular in Korea. Many in Korea think their only answer is to put a certain percentage of their wealth in cryptocurrency. There have been some studies that show that if you put 5-10% of your money in crypto that it improves your overall total portfolio return.

Koreans Know that Being First is the Key

Korea is a great early adopter of technology. They also know that people who move first will make more money than those that move second. Eventually when crypto is broadly adopted than people will start using it as an exchange and it will no longer be volatile in pricing. Most of the volatility in pricing comes from the uncertainty mainly with the government and their policies toward it. The Korean government’s role will be crucial in the success of not only Bitcoin in Korea but other cryptocurrencies. Those that feel the Korean government will embrace Bitcoin and Blockchain are holding their Bitcoin now to hopefully hit it big in the future.