- South Korean traders have piled onto AI crypto projects over the past month, comprising nearly 20% of all AI-related trades.
- The surge comes as the SK government plans to implement a new taxation structure for crypto traders moving into 2025.
- NVIDIA and Microsoft stocks are also immensely popular among South Korean investors.
The Asian Pacific market is experiencing a renaissance in crypto activity. We’ve recently seen Hong Kong legislate crypto ETFs, while Singapore and Australia are already entrenched in crypto culture, innovation and trading.
However, as these nations jostle to become the southern hemisphere’s crypto hub, their work will be cut out for them.
South Korea has long been a huge proponent of the cryptosphere – but in May, they took their love affair to the next level. So, what’s behind the recent explosion in SK’s digital asset markets?
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Tax Changes, Whales and Artificial Intelligence
South Korean traders have burst onto the crypto scene in the past 12 months. Around this time last year, approximately 0.6% of all AI tokens transactions came from South Korean IP addresses.
Fast-forward to May, and that figure is 18.7%. That’s right – nearly 1/5th of all AI crypto trades originated in South Korea.
This phenomenon is not isolated to just the crypto sector. In general, South Korean traders love artificial intelligence. NVIDIA and Microsoft Corp comprise the 2nd and 3rd most popular international stock in the region, re-affirming the market’s eagerness for exposure in the AI industry.
The broader market has been enamoured with AI crypto assets since the start of this year, with record trading volumes seen in March. However, South Koreans are particularly active due to a couple of reasons.
The biggest one, according to Twitter commentator Hansolar, are upcoming changes to crypto regulations in SK. Notably, the government plans to tax profits with a Capital Gains Tax of 22% – meaning that trading crypto will become significantly more expensive in 2025.
As South Korea is home to some of the industry’s biggest whales, it makes sense they’re trying to capitalise on the cheaper tax rates prior to the legislature changes next year.
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