The cryptocurrency deposit is 10/1, but the transaction amount is KOSPI. ‘Super short’ version

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On the 22nd, an employee is checking the market conditions at Bithumb Gangnam Customer Center in Gangnam-gu, Seoul. 2021.4.22/News1 © News1 Reporter Park Jung-ho

30 trillion won. It is the amount of daily transactions in the domestic cryptocurrency market. It is beyond the stock market and is twice the size of the daily trading volume of the KOSPI. However, based on deposits, the size of the cryptocurrency market shrinks to a tenth level. That means that transactions occur frequently.

The main part of the transaction is’altcoin’ (a cryptocurrency, not bitcoin), whose value and identity are unclear. It is pointed out that speculative capital of’single momentum’ that aims for market gains rather than investments is the dominant player in the cryptocurrency market.

◇ Low deposit compared to the transaction amount… “Proof of the Danta speculative market”

According to the financial and cryptocurrency industry on the 23rd, the size of the domestic cryptocurrency market currently stands at about 30 trillion won based on daily transaction amount. The volume of transactions continues to grow. It already exceeded the daily trading amount of 15 trillion won in the KOSPI last March. However, the story changes based on the deposit amount.

According to the investment status data obtained through the four major domestic cryptocurrency trading sites (Upbit, Bithumb, Coinone, and Kobit) by Kwon Eun-hee’s Office of the National Assembly, the total user deposits of these trading sites as of March 31st are approximately It was totaled at 6.486.4 billion won.

According to the Financial Investment Association, the investor’s deposit, which is the reserve fund for the stock market, is 75 trillion 7883 billion won. Deposits and deposits refer to funds waiting in the account to purchase products. When comparing the two markets 1:1, the deposits in the domestic cryptocurrency market are less than one-tenth of the stock market.

© News1 Designer Eun-Hyun Lee

The reason why the trading amount and the deposit amount differ greatly between the two markets is the trading volume. The cryptocurrency market is more frequent when compared to the stock market. For example, if you trade 20 to 30 times a day with 10 million won, the daily transaction price is calculated as 200 million to 300 million won. In the cryptocurrency market, so-called single-shot transactions are actively taking place, which means that the transaction size is larger than the deposit amount. This is interpreted to mean that the current cryptocurrency market is not an investment reporting future value, but a short-term speculative capital that is riding on high market fluctuations.

In the first quarter of this year, the number of users who made more than one transaction at the four major cryptocurrency trading sites in Korea totaled 5114,0003. The total number of transactions during the same period was 1,930,225,050. Arithmetically, the number of transactions per user for three months reaches 377.

An official in the cryptocurrency investment industry said, “(The background of the large transaction amount in the cryptocurrency market than in the stock market) is that there is a lot of liquidity in the market.” It is interpreted to mean that the transaction price as high as KOSDAQ and KOSPI will come out,” he explained.

An official of the cryptocurrency trading site said, “In the stock market (compared to the cryptocurrency market), the period between buying and selling a product is longer than that of ultra-short trading.” In this market, long-term investments are not made.”

◇Investors betting on high volatility with over 90% of altcoins

In particular, investment in altcoins is more dominant than bitcoin in Korea. According to CoinMarketCap, a global cryptocurrency market relay site, Bitcoin’s market cap ratio in the global cryptocurrency market accounts for about 51% and 30% of the total transaction volume. However, in Korea, bitcoin transactions account for 6%.

Regarding this, a cryptocurrency trading site official said, “Only the Dogecoin traded on Upbit on the 16th amounted to 17 trillion won. It is larger than the sum of the daily transaction amount of other domestic cryptocurrency exchanges.” It can be seen that the proportion of coin transactions is high.”

On the afternoon of the 19th, the price of Dogecoin is displayed on the screen installed in the Upbit Lounge of the cryptocurrency exchange in Gangnam-gu, Seoul. On this day, the price of Dogecoin once soared to 440 won. 2021.4.19/News1 © News1 Reporter Seyoung Lim

Dogecoin is a cryptocurrency created under the influence of the Japanese Shiba Inu meme, which was popular on the Internet. Even the developers said that it started out as a joke, but they continued their high-altitude march with unfounded myths. In particular, the value soared as Tesla CEO Elon Musk paid attention. There were rumors about’Doji Day’ that the price would soar on April 20, but Doji Coin plunged 20% on the day of Doji Day. As such, most altcoins are evaluated as having higher volatility than Bitcoin and more speculative than their value as actual cryptocurrencies.

Taken together, this means that in the domestic cryptocurrency market, monotonic transactions for the purpose of speculation about’altcoins’ occur frequently. This is the background of concerns about the overheated cryptocurrency market following 2017-2018. Some experts point out that the government should manage cryptocurrencies within an official financial system.

◇Government, “Cryptocurrency investors are not subject to protection”

Regarding this, Seong-soo Eun, chairman of the Financial Services Commission, said at a general meeting of the National Assembly’s Political Affairs Committee on the 22nd, “The stock market and the capital market protect investors, but even those who enter virtual assets (investments) have different thoughts in terms of investor protection.” It is not a securities issued in accordance with related laws such as laws, and the substance is ambiguous, so the government does not have to protect it from entering such an asset,” he said.

Next, regarding the taxation of the profits of cryptocurrency investments scheduled for next year, he asked, “Will the government protect even buying and selling pictures, and also paying taxes for the gains of transfer.”

Finance Commissioner Eun Seong-soo answers questions from members of the National Assembly at the 1st Political Affairs Committee general meeting of the 386th National Assembly (temporary assembly) held at the National Assembly in Yeouido, Seoul on the morning of the 22nd. 2021.4.22/News1 © News1 Reporter Yoonsung Koo

Financial officials also said, “Cryptocurrency is not recognized as a financial product. Finance is a productive thing that has economic value, but it is difficult to say that it is worth it.” We do not protect and supervise,” he said, and that individuals are responsible for investing in cryptocurrency.

“The government’s role is to warn (invest in risky assets) and to capture illegal business operators,” he said. “If suspicious transaction types are reported, we are reinforcing the monitoring function of financial institutions by handing them over to investigative agencies.” Emphasized.

Regarding this government policy, an official in the cryptocurrency industry said, “The government has an ambiguous attitude toward the cryptocurrency market.” “We are not taking it. There is more money being traded than the stock market, so it is right to go with the least safeguards,” he criticized.

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