There is no disputing that Japan, China, and South Korea have huge communities of investors and developers in the blockchain and crypto currency industries, and that they have a huge influence on the global market, which is a common understanding among blockchain projects worldwide. However, due to cultural and language barriers, it is extremely difficult to accurately understand the situation in each of these three countries and implement appropriate strategies, and very few projects have achieved that.
In this article, we would like to share some simple insights to help you better understand each of the mentioned markets.
First of all, on a very basic level, these three countries, which are often equated by the Western world, have very different linguistic and cultural backgrounds, and fundamentally there is no common trend in terms of projects, services, regulations, or communities surrounding the crypto industry, and each is developing in its own way.
In the previous article, we took a look at the crypto market in China. Let’s take a look at Korea this time!
In South Korea, the entire country is actively engaged in research and development of blockchain technology, including the South Korean government*1, the Seoul municipal government*2, and large corporations including the major internet company Kakao*3. On the investment front, the crypto currency bubble and ICO boom of 2017 made crypto currency investment very popular, but the overheating has now subsided due to rampant fraud and the crypto currency Youtubers getting flamed. At the same time, regulations are being put in place, and in the process, the weeding out of previously numerous media, community, and other related businesses is taking place, and the industry is becoming healthier.
As it relates to crypto currencies, South Koreans are often referred to as a nation that is easily heated and cooled. A symbolic example is the previous “kimchi premium” phenomenon*4. The kimchi premium refers to the price formation that occurs when bitcoin buying demand heats up in the South Korean market, causing the bitcoin price in South Korea to be higher than the global price. During the most active period of bitcoin buying in late 2017, a “kimchi premium” of up to 20% was generated.
A special emphasis in Korea should be placed on community websites. The big ones are Coinpan and Cobak, but there are also several very large community sites on Naver Cafe, a community platform run by the major search site Naver. There are also several very large community sites on Naver Cafe, a community platform run by Naver, a major search site. They prefer to casually exchange information on the bulletin boards of these sites. For new information, they first exchange a number of short, casual posts, and then engage in more in-depth discussions on topics of interest.
TOKENPOST, BLOCKMEDIA, and Blockinpress have been in operation and influential since the early days of crypto currency. However, with the excitement of 2017, followed by two years of market stagnation, and further regulatory developments in the industry, the media has been switching from old to new ones. In particular, being indexed on Naver now has a significant impact on traffic. Due to regulations by the authorities, the expression of content is also strictly regulated and requires to be cautious.
As for messenger applications, Kakao Talk is the most popular and is the base for information exchange. Telegram is also commonly used by more literate users.
In South Korea, Youtubers used to be the most popular influencers and had a real power, but they have been losing influence since 2018 when Spunky, a prominent Youtuber, came under fire for introducing the Scam project and getting paid for it (Spunky was later also attacked in person). These days, bloggers are more influential, and they distribute the information through Naver Blog and some Telegram groups.
The popularity of investing in altcoins other than Bitcoin and Ethereum is a feature of South Korea. They seek out promising, small projects that have not yet received much attention and aim for high returns. Token airdrops (Free token distribution), which are often conducted when a new project is launched, are also popular. Many people look for airdrop information on a regular basis, and it is not uncommon to receive hundreds of applications in a few days.
AMA (Ask Me Anything) events held online are also popular. The weekly AMAs held on Bananatok, a popular blockchain technology-based social media platform in Korea, have grown into an active community of tens of thousands of people, with airdrops taking place every week.
Funds and Projects
There is also a lot of crypto investment by institutional investors, including #HASHED, Unblock Ventures, a subsidiary of the Japanese company LINE, and Kakao Ventures, a subsidiary of Kakao. In particular, #HASHED, which also has a base in San Francisco, has invested in a number of big projects including Ethereum, EOS, and COSMOS, and has a strong presence around the world.
Projects from Korea with a global presence are also popular, including Klaytn, a public blockchain launched by Kakao subsidiary GroundX, and ICON, a smart contract platform called the Korean version of Ethereum. Those are typical examples, and they have received investments from major global funds, especially Korean funds.
To summarize :
- The market is getting healthier after the bubble, regulations are being improved, and the full-scale adoption of crypto currencies and blockchain is progressing.
- Channel selection and communication methods must be tailored to the Korean national character.
- Some projects and funds have a global presence, and the community is watching them closely.
The links below provide an overview of market trends in China and Korea, as well as information on cryptomedia in English-speaking countries.
*1 블록체인 기반 온라인 투표 시스템 나온다 (https://v.kakao.com/v/20200624165519865)
*2 서울시 11월 블록체인 행정서비스 도입 준비 ‘착착’ (https://blockinpress.com/archives/20618)
*3 Korean internet giant Kakao is launching a blockchain company (https://techcrunch.com/2018/03/05/korean-internet-giant-kakao-is-launching-a-blockchain-company/)
*4 Kimchi Premium (https://www.investopedia.com/terms/k/kimchi-premium.asp)