Chainalysis: East Asian Crypto Adoption Driven by Institutions

By José Oramas September 20, 2024 In Cryptocurrency, Hong Kong, Korea
  • Eastern Asia has become the sixth largest crypto economy globally, driven mainly by institutional trading in South Korea and Hong Kong, with over US$400B in on-chain value from July 2023 to June 2024.
  • South Korea leads the region with nearly US$130B in crypto value, followed by Hong Kong and Japan.
  • Hong Kong’s favourable regulatory environment has attracted institutional interest, allowing it to act as a gateway for accessing Chinese market demand.

Eastern Asia has risen to the sixth spot in the global crypto economy, driven by institutional trading in South Korea and Hong Kong, according to a Chainalysis report.

Related: Hong Kong Government to Issue First AI Finance Policy, Set to Transform Trading and Crypto Sectors

From July 2023 to June 2024, the region processed over US$400B (AU$592B) in on-chain value, accounting for 8.9% of the global total. A significant 64.7% of this activity came from large transactions on centralised exchanges.

Source: Chainalysis

South Korea Leads Region with Easy Access to Trading

South Korea leads the region with nearly US$130B (AU$192B) in crypto value during the period. As a “top IT nation”, said a leader at a South Korea-based exchange to Chainalysis, the country provides easy access to digital asset trading through mobile and PC. 

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The report reads: 

In terms of actual trading strategies, it appears that South Koreans often use local exchanges to on-ramp and move funds to global exchanges, which provide access to diverse assets, arbitrage opportunities, margin, and off-ramping.

Chainalysis

According to insights from Chainlaysis, the growth in the East Asian region is partly due to public mistrust of traditional finance and the involvement of major companies like Samsung in blockchain projects. 

Related: Sony’s Soneium Partners with Transak to Revolutionise Gaming Onboarding and Monetisation

Source: Chainalysis

Hong Kong Fastest Growing Region in East Asia

Besides South Korea, Hong Kong, Japan, Taiwan, and China are some of the leading countries in terms of on-chain transferred value. While South Korea might have traded the most volume, Hong Kong has the fastest-growing rate in East Asia.

Hong Kong has benefited from China’s 2021 crypto ban, growing into a key crypto hub with an 85.6% year-over-year increase in adoption. According to the report, the city now ranks 30th in Chainalysis’ Global Crypto Adoption Index. 

Hong Kong has attracted institutional interest thanks to its favourable regulatory environment. Although it is not an independent country as such—it’s a “Special Administrative Region” of China—it has a distinct legal and regulatory framework, which has enabled institutions to access Chinese market demand through Hong Kong.

José Oramas
Author

José Oramas

José is a journalist and translator with a keen interest in blockchain and cryptocurrencies.

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