Korean investors flocked to "currency stocks", and BitMine became the new favorite

Author: angelilu, Foresight News

South Korea's crypto trading boom has quietly poured into the "stock market". The "kimchi premium" was once a spectacle of talk in the global cryptocurrency market. The country of only 51 million people has experienced an explosion of Bitcoin trading volume that can shake up the global market. Although the government's strong regulation has made this premium phenomenon a thing of the past, the adventurous gene in the bones of Koreans has not faded, and they are just looking for new exports.

And the main force of this frenzy is not the Korean institutional predator, but the younger generation of retail investors who are betting on the future. In a country of 51 million people, as many as 18 million people are active in the digital asset market, accounting for more than one-third of the country's total population, and nearly a quarter of young people aged 20 to 39 see cryptocurrency speculation as the only bargaining chip to turn their lives around.

BitMine is the latest trading target According

to Bloomberg, citing data from South Korean securities custodians, South Korean investors have invested $259 million in BitMine shares since July, pushing BitMine to the top spot in South Korea's overseas stock purchase list.

BitMine, an American Bitcoin mining company backed by Peter Thiel, the "King of Silicon Valley", recently transitioned from Bitcoin mining to adopt ETH as its financial strategy, and now holds more than 1.15 million ETH, worth more than $4.96 billion. making it an important "treasury" for holding ETH on Wall Street. Coincidentally, Tom Lee, a key driver of bringing ETH to Wall Street, is also a director of BitMine.

Tom Lee is a Korean-American. After experiencing the bloody lesson of the LUNA coin crash, Korean investors' enthusiasm for risky assets has not subsided, and at this time, the emergence of a "person of his own" from overseas who has achieved great success in the financial world has undoubtedly gained extremely high trust and attention. For Korean retail investors, this is not only the opinion of an industry expert, but also a call with national emotions. This subtle cultural identity further strengthens their confidence and enthusiasm for the crypto market.

Why not buy ETH directly?

A key question arises: since you are bullish on Ethereum, why not just buy ETH and buy BitMine stock in a big circle?

Volatility may be the answer. Although cryptocurrencies are known for their extreme volatility, some retail investors may believe that participating in the stock market can provide a different kind of exposure.

In terms of actual backtesting, the price of ETH rose from $2,500 to $3,800 in July, an increase of 52%. During this period, the price of BitMine stock BMNR rose from $46 on July 1 to $135, a maximum increase of 193%.

However, as of the time of publication, ETH has risen to $4,300, the highest level since December 2021. While BMNR's price has only recovered slightly to $58.98. South Koreans with high risk appetite are more likely to choose risk-on Korean investors seem to be more inclined to choose more volatile investment varieties, although this "roller coaster" rise and fall can cause countless retail investors chasing higher prices to fall from the clouds.

However, in fact, the direct trading volume of ETH is not low, and only Upbit, the largest exchange in South Korea, had an ETH trading volume of $111.1 billion in the whole month of July, and the net inflow cannot be counted for the time being.

BitMine is just the epitome of the "coin stock" frenzy

However, this is not the first time Koreans have rushed to "currency stocks", which has already attracted the attention of Korean investors when the stablecoin company Circle was listed, with a net purchase of $450 million in the month of Circle's listing, pushing Circle's price-earnings ratio to 187 times, a figure that far exceeds the reasonable valuation of any traditional fintech company.

This frenzy has also swept the Korean market. The new government's crypto-friendly policies in South Korea have raised expectations among retail investors, which is part of the reason why the South Korean Composite Stock Price Index has risen to a nearly four-year high. When the Bank of Korea announced the launch of a digital currency project (CBDC), retail investors smelled a business opportunity. The stock prices of companies participating in the project, such as Kakao Pay and LG CNS, seem to have been on a rocket in a short period of time. Kakao Pay's stock price has doubled in just one month, while LG CNS has followed suit, soaring nearly 70%.

When the craze finally subsides

, the "crypto-related stocks" craze in South Korea is not so much a financial phenomenon as a manifestation of a deep social phenomenon. It reflects how young Koreans are eagerly seeking untraditional, high-risk breakthrough paths in an environment where traditional wealth accumulation channels are increasingly narrow.

As Dragonfly's Hadick warns, "When the premium disappears, investors sell stocks quickly, and these phenomena are usually short-lived." The valuations of "crypto-related stocks" that have been driven up by sentiment and speculation can essentially be a huge bubble. When the craze finally subsides, who is swimming naked, maybe the truth will be revealed then.