2024-03-17 11:57:23
Korean coin ant likes jobcoin
Transaction amount is 10 times larger than Bitcoin
Fear of larger losses compared to overseas during a down market
[사진 출처 = 픽사베이]
The most worrying thing about the Korean coin market, which is overheated by the FOMO (fear of being left out) market, is that investors are investing heavily in altcoins. Altcoin refers to any coin other than Bitcoin. The investment amount of domestic investors in altcoins is 10 times that of Bitcoin.
Altcoins are usually more volatile than Bitcoin. If the overheated coin market cools down, the losses of domestic investors who invested in altcoins are likely to be greater than those of overseas investors.
According to CryptoQuant, a blockchain analysis company, on the 17th, the amount of Bitcoin traded by investors on Upbit, Korea’s No. 1 exchange, from the beginning of this year to the 15th was 24.9084 trillion won.
On the other hand, during the same period, the combined trading volume of 16 major altcoins, including Ethereum, Ripple, Doji, and Polkadot, amounted to 247.752 trillion won. It is a whopping 9.95 times.
This figure does not include some altcoins whose prices have soared and whose transaction amounts have been high. Domestic investors’ preference for altcoins appears to be much higher than this in reality.
The problem is that investments focused on altcoins generally have a high probability of loss. In fact, Bitcoin fell about 11% over the three days from the 14th to the 16th, and the recent weekly return was low at -1.53%. Among the 118 altcoins listed on the Upbit Korean Won Market, 104 Bitcoins recorded an average loss of 11.4%. This is because when Bitcoin falls, the decline in altcoins is greater.
Korean investors’ love for altcoins also manifests itself in abnormal overheating. A representative example is ‘HIFI’, whose price soared 120% in just one day on the 13th. This coin is issued based on the Ethereum network. On the 13th, Ethereum was about to be upgraded, and as a result, the transfer of Ethereum-based coins was stopped. Hi-Fi is one of them.
When transmission was temporarily halted, a phenomenon called the ‘cage market’ occurred. As the quantity on the coin exchange becomes limited, price manipulation becomes more likely to occur. Usually, when the price on a specific exchange is higher than that of another exchange, arbitrage occurs and the prices between exchanges are adjusted, but this phenomenon becomes impossible.
Hi-Fi, which was priced at 1,600 won on Bithumb on the 12th, soared to 2,400 won at 9 o’clock and to 3,700 won at 10 o’clock. At the same time, there were no price changes on global exchanges such as Binance and Gate.io. The kimchi premium, which is the price difference between the Korean market and the global market, exceeded 125%. It is purely the overheated investment enthusiasm of domestic investors that has caused the coin price to soar.
Once the Ethereum upgrade was completed and the network opened, it led to a sharp drop. Hi-Fi has returned to 1,600 won. Individual investors had to suffer huge losses without any time to sell their stocks.
One coin industry official said, “As the market has recently overheated, there is a possibility that altcoins will rise rapidly, but if you invest in these coins, unless you are lucky, most of them are more likely to suffer losses due to a sharp drop.”
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