Asian cryptocurrency trading platform Huobi recently hosted a Dogecoin (DOGE) promotion in celebration of the coin’s added support on its platform. The event has been dubbed “The Great Doge Race” and will run from May 15 to May 25. It will see a total prize pool of 1,500,000 DOGE with a prize of 300,000 DOGE being awarded to the top individual trader and another 300,000 DOGE going to the top trading firm.
It’s been a rough year for the Korean won (KRW). In the span of just a few months, the South Korean currency lost almost half of its value, against the US dollar. Here’s a couple of charts to give you an idea of just how dramatic the drop has been: Dogecoin, on the other hand, has pretty much gone nowhere.
South Korean cryptocurrency exchanges processed more Dogecoin transactions yesterday than the average volume of stock trading on the country’s traditional exchanges, according to data from several sources.
Dogecoin up
According to local news agency Hankyung, the average daily trading volume of the Korean Composite Stock Price Index (KOSPI), a representative index of Korean companies, was only $9 billion in April 2021.
Other relevant reports also show that the volume of stocks in Korea peaked at 12 trillion won ($10 billion) in a few months last year.
But yesterday’s media hype overshadowed that. According to exchange tool CoinGecko, Dogecoin volume has surpassed $16 billion on the Korean exchange UpBit alone. On the other hand, smaller exchanges like GoPax and Huobi Korea earned more than $50 million and $20 million, respectively.
However, it remains unknown how much of this volume comes from laundered transactions – the use of trading bots to increase trading volume without any real demand.
Dogecoin’s volume has also surpassed that of Korean Forex. The Korean exchange rate is about $7-8 billion a month, or $200-300 million a day. Doge’s trading volume on Upbit alone last night was $13 billion, so yes, Doge is bigger, tweeted Doo Wan Nam, head of business development for MakerDAO Asia from Seoul.
Korean currency is worth $7-8 billion a month, or $200-300 million a day….. Doge’s trading volume on Upbit alone was 13 billion last night, so yes, Doge is bigger.
– Doo (@DooWanNam) May 5, 2021
According to a local report cited by Nam, the volume of currency trade has remained between $5 billion and $8 billion in recent months.
Why are cryptocurrencies better than stocks?
As mentioned earlier, the high volume of cryptocurrency trading by Korean investors is a result of high-risk, high-reward gambling that can offer them higher returns on capital in a short period of time compared to the low returns offered by traditional banks and financial institutions.
Traditional stock market funds or other indices that guide the market show a steady decline in the country anyway.
Data from the country’s Financial Investment Association and the Financial Services Commission showed that inflows fell from 74 trillion won in January 2021 to 63 trillion won at the end of last month, a difference of more than 10 trillion won (nearly $8.8 billion), the report said. During the same period, inflows on cryptocurrency exchanges were higher than normal.
The data also showed that cryptocurrencies worth more than 445 trillion won ($392 billion) have already been traded on local exchanges in the first two months of 2021 – more than last year’s total trading volume (356 trillion won, or $314 billion).
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