The Bank of Korea warned that the domestic cryptocurrency market is at high risk of manipulation due to centralized trading: the top 10% of accounts account for 91.2% of the volume, as investors shift from accumulating to taking profits.
The latest Financial Stability Report shows that the activity level of the South Korean cryptocurrency market remains above the global Medium (157% compared to 112%), but hot money is shifting towards domestic equities and leveraged US equity ETFs.
- South Korean cryptocurrency market activity: 157% vs. global 112%.
- 10% of accounts generated 91.2% of the volume, increasing the risk of manipulation.
- If we open the door to institutions and ETFs, we will be more vulnerable to global volatility.
High activity, but behavior shifts to profit-taking.
The Bank of Korea (BOK) noted that the South Korean cryptocurrency market remains more active than the global Medium , but investors are prioritizing profit-taking over increasing their positions.
According to the report, the South Korean market's activity level reached 157%, compared to 112% globally. However, investor behavior has shifted from aggressive position building to concentrated profit-taking, indicating that the primary driver is realizing profits rather than continuing to accumulate.
The Bank of Korea (BOK) also stated its expectation that when Bitcoin surpasses $100,000 in 2025, retail investors in South Korea may sell off heavily to lock in profits. This development could increase short-term supply pressure if triggered simultaneously on a large scale.
Centralized trading and risks sensitive to global volatility.
The volume in a small group of accounts increases the risk of manipulation, and loosening access for institutions/ETFs could make the market more sensitive to international fluctuations.
Data in the report shows that 91.2% of volume comes from the top 10% of accounts. This concentration increases the risk of market manipulation, especially when large buy/sell orders can create significant price volatility compared to the rest of the market.
The Bank of Korea (BOK) warns that if access for institutional investors and ETFs is liberalized, the vulnerability of the South Korean market to global volatility will worsen. Currently, hot money has been observed shifting to the domestic stock market and leveraged US equity ETFs.
