Even After Massive 80% Losses, Bitcoin Remains as a Symbol of Hope to South Korean Millennials
In late 2017, the Bitcoin price in the South Korean crypto exchange market peaked at nearly $23,000 as the so-called “Kimchi Premium” reached its height.
Retail traders and individual investors were driving the demand for Bitcoin and other cryptocurrencies like Ripple to unprecedented levels to a point in which local cryptocurrency exchanges could no longer provide sufficient supply.
Mainstream media outlets and national television programs featured debates on cryptocurrencies with high-profile government officials and executives in the digital asset industry.
Prices of Cryptocurrencies in January 2018 in South Korea on Bithumb, Source: kinews.net
Investors of all ages invested in the cryptocurrency market. But, the largest portion of the investors were millennials and young adults who newly entered the corporate society of South Korea.
Finding it nearly impossible to save up possibly for decades to purchase an apartment due to surging house prices in Seoul, many millennials turned to Bitcoin.
Following an 80 percent decline from its all-time high, the vast majority of cryptocurrency investors in South Korea are now facing serious financial issues.
Still, Bitcoin is considered a symbol of hope for many investors and young adults in South Korea.
Why Did Bitcoin Appeal to Young Investors?
In South Korea, despite its miraculous economic growth in the past two decades, a large number of individuals are living paycheck to paycheck with little money to save up to purchase a house.
In May 2018, JoongAng, a mainstream media outlet in South Korea, reported that with the price of an apartment in Seoul averaging at $700,000, it will take around 11 years for most employees in the country to purchase a small apartment.
But, the 11-year figure is exaggerated as it assumes that an individual would save all of their income without any expenses for 11 year straight years. When rent, taxes, transport, and other forms of expenses are deducted, employees are often left with less than 50 percent of their takehome pay, which would double the 11-year span.
Bitcoin appealed to young investors and individuals of all ages because of the harsh reality of the housing market and employment situation in South Korea.
About 1 out of 10 fresh college graduates land a job once they graduate and the rest spend years trying to land a full-time and a stable job.
Even when millennials successfully secure a job with a 90 percent chance of rejection, the compensation typically does not match the high living costs of South Korea, especially in Seoul.
As such, although investors recorded massive losses by investing in Bitcoin, without it, many young adults feel hopeless at the thought of obtaining financial stability in the long run.
Kim Han-gyeol, a part-time software engineer in South Korea, told The New York Times:
“I felt a sense of shame when I lost money on my Bitcoin investments, not once but twice because of my greed to make a fortune in one go. There is nowhere else to go to recover my losses anyway.”
Government is Doing its Job
The government of South Korea has allocated a relatively large portion of its resources in increasing the standards of the cryptocurrency sector and regulating the local digital asset exchange market.
It is not possible to prevent individuals from speculating on the prices of crypto assets. While the government initially intended to restrict speculation in the cryptocurrency market, the government pivoted to improving the infrastructure supporting cryptocurrencies.
|CryptoCurrency||USD||Change 1h||Change 24h||Change 7d|
|Bitcoin||0.31 %||1.12 %||2.33 %|
|Ethereum||0.07 %||2.51 %||0.67 %|
|XRP||2.30 %||0.02 %||0.27 %|
|EOS||0.39 %||5.27 %||7.19 %|
|Bitcoin Cash||0.17 %||3.90 %||0.04 %|
|Litecoin||0.50 %||6.78 %||9.03 %|
|Binance Coin||0.09 %||0.71 %||22.36 %|
|Cardano||1.19 %||4.38 %||13.41 %|
|Stellar||1.10 %||3.67 %||4.67 %|
|Tether||0.04 %||0.08 %||0.02 %|
|TRON||0.33 %||4.69 %||8.46 %|
|Monero||0.82 %||2.11 %||2.42 %|
|Cosmos||0.24 %||16.74 %||2.19 %|
|Dash||0.17 %||2.91 %||2.48 %|
|Tezos||0.39 %||0.46 %||15.66 %|
|Bitcoin SV||0.05 %||4.01 %||20.50 %|
|IOTA||0.29 %||4.24 %||5.50 %|
|Ontology||0.04 %||6.70 %||11.22 %|
|NEO||0.06 %||3.52 %||7.07 %|
|Ethereum Classic||0.17 %||5.49 %||9.01 %|