Bitcoin‘s recent surge is once again driven by the momentum generated by Asian investors, with traders from South Korea, China, and other Asian countries accounting for approximately 70% of bitcoin trading volumes, a trend reminiscent of the 2021 rally, as per data from crypto exchange The Block.
In February alone, Asia contributed a substantial $791 billion to the total bitcoin traded, which stood at $1.17 trillion. In contrast, North American investors lagged significantly behind, with only $113 billion in bitcoin trading volume during the same period. This pattern has been consistent since November, highlighting the substantial influence of Asian investors in the cryptocurrency market.
In China, a sense of FOMO (Fear of Missing Out) has gripped small investors disillusioned with a sluggish stock market. Searches for “bitcoin” on the popular messaging app WeChat surged 12-fold in February. Mia Wang, a finance industry employee in China, expressed a desire to buy bitcoin despite its high price, fearing it might not undergo a correction soon.
Bitcoin, currently trading around $65,000, has witnessed a staggering 148% rise since early October, primarily fueled by U.S. regulators approving spot bitcoin exchange-traded funds (ETFs). BlackRock’s iShares bitcoin trust has benefited significantly from these investment flows.
Investors are also flocking to bitcoin in anticipation of April’s “halving” event, which could reduce supply and subsequently drive prices higher. With the supply of bitcoin limited to 21 million, and 19 million tokens already mined, scarcity is a key factor contributing to the cryptocurrency’s appeal.
The legal landscape for bitcoin trading varies across Asian jurisdictions, ranging from more permissive regulations in Japan to a ban on trading in China. South Korea commands a significant share of bitcoin cash tokens and listed futures markets.
South Koreans have exhibited a growing interest in bitcoin ETFs, despite their ban, opting for bitcoin ETF futures instead. Bitcoin trading volumes on South Korean exchange Upbit surged threefold in a week, reaching 67,000 coins.
While U.S.-based exchanges such as Coinbase, Bitstamp, and Binance continue to dominate global volumes at 50%, Hong Kong has embraced crypto trading, allowing bitcoin ATMs and shops. Hong Kong’s largest bitcoin futures ETF, managed by CSOP Asset Management, has seen a five-fold increase in assets under management in the past five months, reaching over $100 million.
India, with its growing interest in cryptocurrencies, sees a significant portion of trading conducted on offshore exchanges like Binance and KuCoin. Indians traded crypto worth 350,000 crore rupees via offshore platforms between July 2022 and July 2023, constituting over 90% of the total crypto trading volume by Indians, according to estimates from local think-tank Esya Centre.
