After Trump's election, the amount held by domestic cryptocurrency exchanges nearly doubled
The end of last year's domestic cryptocurrency exchange holdings and transaction amounts soared due to Trump expectations (Source: Bank of Korea)
It was found that after President Donald Trump was confirmed for re-election at the end of last year, the domestic cryptocurrency market expanded rapidly. With price increases and improved investor sentiment intertwined, the number of investors, exchange-held assets, and average daily transaction amounts all increased in all directions.
According to the ‘Report on Payments and Settlements for 2024’ announced by the Bank of Korea on the 21st, as of the end of December last year, the total market capitalization of five major domestic cryptocurrency exchanges was 104 trillion KRW. This is a figure that has almost doubled from the 50 trillion KRW level that was maintained from July to October just a few months ago. In particular, the atmosphere reversed as it surged to 102 trillion 600 billion KRW in November alone, right after President Trump's election.
Trading volume also increased significantly during a similar period. The average daily transaction amount, which remained at 2 to 3 trillion KRW per day from July to October, rose to 14 trillion 900 billion KRW in November and soared to 17 trillion 200 billion KRW in December. During the same period, the price of Bitcoin jumped more than 36% from 67,800 dollars to 92,640 dollars.
The Bank of Korea analyzed, “After President Trump's election, the prices of major cryptocurrencies such as Bitcoin increased, and investor sentiment improved, leading to a surge in new investor entry.”
The number of investors also increased significantly. The number of investor accounts registered at the five major exchanges was 18.25 million as of December last year, an increase of 1.53 million compared to July of the same year. It was found that the waiting investment funds, KRW deposits, also increased to 10 trillion 700 billion KRW.
This market expansion is even more noteworthy as it coincides with the implementation of the ‘Cryptocurrency User Protection Act’ in July last year. This law requires businesses such as exchanges to separate user assets from their proprietary assets and imposes fines and liability for damages for unfair trading, providing investor protection measures. Additionally, the Bank of Korea is given the right to request data submission, enabling it to regularly monitor market trends based on the trading information from the five major exchanges.
Meanwhile, major discussions on cryptocurrency policy directions are taking place around the ‘Virtual Asset Committee’ under the Financial Services Commission. This committee, launched in November last year, is handling major issues such as expanding corporate entry into the cryptocurrency market, refining stablecoin regulations, and enacting ‘User Protection Act Phase 2’ legislation.
The Bank of Korea particularly pointed out regarding stablecoins, “Unlike general cryptocurrencies, they have the nature of a payment method and, if they replace fiat currency, they could pose a threat to monetary policy and financial stability,” saying that it plans to actively reflect the central bank's perspective in the future legislative process.