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Cryptoverse: Asian traders give bitcoin blast-off

A depiction of cryptocurrency in this image shot, January 24, 2022.

SEOUL/MUMBAI, March 5 (mod1s) - Bitcoin's wild surge is being fueled by investors in Asia.
Traders in South Korea, China and other Asian nations are responsible for nearly 70% of bitcoin trading volumes, just as they were in 2021 when bitcoin last achieved such stratospheric highs, according to crypto exchange statistics from The Block. 

Asia accounted for $791 billion of the $1.17 trillion worth of bitcoin exchanged in February, with North American investors following considerably behind with $113 billion, generally matching a pattern observed since November, the data showed.

In China, FOMO has captured many small investors disappointed with an anaemic stock market. On popular messaging app WeChat, searches for "bitcoin" rose 12-fold in February.
"I want to buy some bitcoin at a good price and hold," Mia Wang, a financial sector employee located in China's eastern region of Zhejiang, told Reuters. "It has jumped a lot and is expensive now, but I worry it won't have any correction."

Bitcoin is trading at approximately $65,000 - close to its high of $69,000 - following an eye-popping 148% surge since early October, mostly spurred by U.S. authorities authorizing spot bitcoin exchange-traded funds (ETFs). BlackRock's iShares bitcoin trust (IBIT.O), opens new tab has been a key beneficiary of such investment flows. 

Traders have also flooded into the world's largest cryptocurrency ahead of April's "halving" event, which may restrict supply and drive prices higher. Supply of bitcoin is restricted to 21 million, of which 19 million tokens have already been mined.

The legality of trading and holding of bitcoin differs throughout Asian states, ranging from Japan which has comparably lax rules to China where there's a prohibition. Spot bitcoin ETFs are outlawed in South Korea, but local brokers give simple access to bitcoin futures ETFs.

KOREA GOES BIG ON BITCOIN 

South Korea holds a 10% share of the bitcoin cash tokens and listed futures markets, predicts Hong Song-uk, a cryptocurrency expert at NH Investment & Securities.

South Koreans have made a net investment of $23.4 million in the U.S.-listed 2X Bitcoin Strategy ETF this year, compared with $25.1 million in all of 2023, according to the Korea Securities Depository. In February, they also invested $6.89 million in Proshares Bitcoin Strategy ETF .

"Because trading of bitcoin ETFs has been banned here, more and more Koreans are buying bitcoin ETF futures, which is helping with its pop now," added Hong.

Bitcoin trade volumes on Upbit approximately trebled to 67,000 coins last week compared the previous week, the South Korean exchange claimed. 

Yet U.S.-based exchanges like as Coinbase (COIN.O), opens new tab, Bitstamp and Binance, which operate in several Asian regions, continue to hold the highest proportion of worldwide volumes at 50%, according to research company Kaiko.

Hong Kong has decriminalised crypto trading over the last year, while permitting bitcoin ATMs and stores to cater to small investors and even offshore Chinese financial institutions. 

The city's biggest bitcoin futures ETF, run by CSOP Asset Management, has seen its assets under management balloon five-fold in the previous five months to over $100 million. 

There is also considerable interest in India, where multiple local crypto exchanges operate lawfully, but most trading is done on offshore exchanges like as Binance and KuCoin who do not impose the 1% transaction monitoring cost that domestic operators do. 

Between July 2022 and July 2023, Indians exchanged crypto worth 350,000 crore rupees via offshore crypto platforms, accounting for more than 90% of the overall crypto trading volume by Indians, according to estimates from the Esya Centre, a local think-tank. 

Source: https://www.reuters.com/

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