FILE PHOTO: Representations of cryptocurrencies Bitcoin, Ethereum, DogeCoin, Ripple, Litecoin are placed on PC motherboard in this illustration taken, June 29, 2021. REUTERS/Dado Ruvic/Illustration/File Photo
Seoul: About one in four South Koreans aged 20 to 50 currently hold virtual assets, with the majority of these investors being men in their 30s and 40s working in white-collar jobs, a new report from the Hana Institute of Finance shows.
The report, titled 2050 Generation’s Virtual Asset Investment Trends, highlights how investor behaviour has evolved from trend-chasing to a more analytical and planned approach.
The study shows that aggressive and risk-tolerant individuals are significantly more likely to invest in cryptocurrencies.
Despite holding fewer liquid assets than the average, these investors allocate more capital overall to financial products, with virtual assets comprising some 14% of their total holdings.
Initially driven by fear of missing out, or Fomo, motivations for virtual asset investment have shifted. Now, more investors cite growth potential, portfolio diversification and structured savings as key reasons.
Channels for gathering investment information have also changed, with reliance on peer influence declining and the use of official exchanges and analytical platforms rising.
“Virtual assets are already playing a central role in investor portfolios and will likely become more mainstream. As such, there is strong demand for legal frameworks and expanded roles for traditional financial institutions,” said Yoon Sun-young, a research fellow at Hana Institute of Finance.
For banks, it is both an opportunity and a challenge, according to Yoon.
“They must prepare proactively for ecosystem expansion by diversifying crypto-based financial products and enhancing integrated investment management,” Yoon said.
However, friction in the investment process persists. Some 76% of respondents reported inconvenience due to the inability to link their existing bank accounts to crypto exchanges.
This issue stems largely from the mandatory one-exchange, one-bank system in South Korea.
When choosing a trading platform, investors now prioritise which bank the exchange is linked with over the platform’s interface or trading features.
Currently, 70% of respondents currently use Upbit, which is linked to K bank.
The report also indicates that seven in 10 respondents are interested in future investments in virtual assets.
Many view integration with traditional financial institutions and stronger regulatory frameworks as key to improving trust and convenience. — The Korea Herald/ANN
