In the last 2 weeks we have seen massive rises in value for top 10 currencies on Coinmarketcap. Guess what they have in common?
That's right, they are listed on Bithumb, the Seoul based cryptocurrency exchange in the number # in the world. In terms of trading volume it has no equal. Not even close. Check out the overview taken from Worldcoinindex.
Bithumb currently has almost 3 times the trading volume ($676 mln) than the #2 exchange Bittrex ($260 mln). And that is only with 6 listings versus the 193 listings on Bittrex. Imagine the trading volumes it could have with more currency pairs. It reached a record total of $870 mln daily trading volume less than a week ago.
Bithumb is not the only Korean exchange out there of course. And one worth mentioning here is Korbit, which can also be found in the top 13 (shown in the bottom of the screenshot above). It has a daily volume of $55 mln which is approximately 20% of the Kraken Or Bittrex. Korean exchanges are thus quite popular and more startups are on its way.
So why are Korean exchanges doing so well?
The first reason will sound a bit obvious but here goes: It is because it is used by Koreans. And Koreans are experiencing an economic situation also described as a perfect storm on by Steve Lim, CSO of Coinone (which by the way is also a Korean starting exchange) inForbes:
"The fever over Bitcoin and Ethereum is a result of a perfect storm of conditions. Local investment options have been focused primarily on real estate and the domestic stock market. But both those markets are getting squeezed. Real estate has been overheating as prices and interest rates rise."
Lee Seung-gun, who is the president of the Korea Fintech Association adds:
"And the stock market just got a lot more cumbersome..."
Paired with increased regulation in the more traditional derivatives markets and gambling being largely illegal a true run on crypto currencies was the result.
The second reason has to do with the recent tensions between North Korea and the US. It resulted in investors flocking to cryptocurrencies even more. Rather than risk taking, here the motive is a flight to safety, as cryptos are generally seen as safe haven investments due to the poor correlation with other traditional assets.
So what happened to the currencies listed in the title?
All of them got hyped last week with massive amounts of trading volume on Bithumb. Lets explore them one by one:
Bitcoin Cash - a few days of massive buying power from the Koreans resulted in a price above $900. The surge was mostly due to the fact that BCH was able to prove it could mine 8 MB sized blocks and faster processing speeds than BTC.
DASH - a huge surge in price on August 19th resulted in an all time high of approximately $330. Though stated the move was on the back of a partnership with Arizona state, the move wouldnt have been as strong without our dear Koreans.
XRP - Ripple surged 70% overnight on the 22nd to 23rd of August due to a price rush on Bithumb. Ripple, the company that created XRP, already announced last month it saw increased activity on the Korean exchange for its currency. Is this a sustained move (likely for DASH and Monero) or a pump and dump?
ETC - Ehereum Classic soared today due to rumors of Korean trading interest. It moved from $14 to $18 in less than an hour! Currently it is trading around $16 and is one of the biggest gainers in the top 10.
Even Monero which is not yet listed on the Korean exchange, but is rumored to become one of the few listed on Bithumb, has seen a massive price increase because of it reaching an all time high of above $100.
What do we learn from this?
Well for one, if you invested in a currency that is (to be) listed on Bithumb (see overview below), you are all but guaranteed a large price increase sooner or later.
So have you invested in a currency which you think may be undervalued? Well, maybe you should try and get it added to the Korean exchanges. I guarantee you increased volatility at least!
Thanks for reading and stay tuned!
References:
https://www.forbes.com/sites/elaineramirez/2017/08/02/crazy-for-cryptocurrency-why-south-koreans-are-risking-it-all-on-ethereum/#6a85d2f56341
https://elaw.klri.re.kr/eng_service/lawView.do?hseq=28627&lang=ENG
https://www.cryptocoinsnews.com/u-s-north-korea-tension-drives-investors-to-cryptocurrencies-to-diversify-risk/
https://www.morningstar.com/news/pr-news-wire/PRNews_20170818CN67558/bithumb-has-exceeded-870-million-in-daily-trading-volume-for-the-first-time-since-the-opening-of-the-domestic-virtual-currency-market.html
https://cointelegraph.com/news/monero-price-jumps-over-40-percent-on-rumors-it-will-soon-debut-on-bithumb-exchange
https://www.cnbc.com/2017/08/18/bitcoin-cash-surges-as-investors-bet-on-its-faster-processing-speeds.html
http://www.livebitcoinnews.com/current-xrp-price-rush-caused-koreas-bithumb-exchange/
Images:
https://btcmanager.com/south-korea-lays-foundation-for-cryptocurrency-adoption/
https://www.worldcoinindex.com/exchange
https://coinmarketcap.com/
https://www.worldcoinindex.com/coin/bitcoincash
https://www.worldcoinindex.com/coin/dash
https://www.worldcoinindex.com/coin/ripple
https://www.worldcoinindex.com/coin/ethereumclassic