Eastern Asia has become the world’s sixth-largest cryptocurrency economy, primarily fueled by institutional activity in South Korea and Hong Kong, according to a Chainalysis report released on Sept. 18.
Eastern Asia’s Share of Global Crypto Value
The region contributed 8.9% of the global cryptocurrency value received between July 2023 and June 2024. This equates to over $400 billion in on-chain value. Notably, 64.7% of this amount came from large transfers via centralized exchanges, suggesting significant institutional involvement in the region’s crypto transactions.
The report also highlighted the heavy use of decentralized exchanges (DEX) and decentralized applications (dApps) by institutions. This institutional presence could be tied to investors pursuing strategies that exploit market inefficiencies, such as price divergences on DEXs, which offer more arbitrage opportunities compared to centralized platforms.
South Korea Leads Eastern Asia’s Crypto Market
South Korea remains the leading Eastern Asian country in terms of cryptocurrency transaction volume, receiving close to $130 billion in crypto during the study period. Local exchange executives attribute this high activity to the population’s growing distrust of traditional financial systems. Furthermore, large South Korean companies like Samsung have embraced blockchain technology, which enhances the appeal of cryptocurrency as a transparent and efficient investment option.
South Korean traders typically use local exchanges as entry points for their crypto transactions before moving funds to global platforms. This explains why both centralized and decentralized platforms see considerable institutional activity in the country. One crypto exchange executive noted that South Korea’s advanced information technology infrastructure gives crypto investors easy access to digital asset trading.
Hong Kong Gains from China’s Anti-Crypto Stance
While China imposed a blanket ban on cryptocurrency in 2021, Hong Kong has capitalized on the demand generated by this restrictive stance. Chainalysis reports that Hong Kong has emerged as a leading crypto hub in the Greater China region due to its favorable regulatory environment and clear guidelines for crypto-related activities.
Between July 2023 and June 2024, Hong Kong experienced an 85.6% growth in its crypto market, the highest in Eastern Asia, and ranked 30th globally in terms of crypto adoption. Hong Kong’s institutional growth is also noteworthy, as firms in the region can cater to the Chinese market by operating from Hong Kong.
Kevin Cui, CEO of OSL, a leading institutional-grade crypto services provider, highlighted that the approval of spot crypto-related exchange-traded funds (ETFs) has significantly boosted institutional interest. ETFs offer a regulated entry point into digital asset investment, enabling a smoother transition from traditional financial instruments to direct digital asset engagement.
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