Although blockchain technology is extremely current and typically associated with the millennial generation, South Korea is demonstrating that the association is not necessarily valid, even when it comes to virtual currencies.
Although brisker traders than their older counterparts, many middle-aged Koreans have a shared HODL tendency or other adamance about cryptocurrency that younger citizens lack.
Indeed, it would appear that the fact that younger Koreans account for most of the trading whereas older Koreans account for most of the ownership of digital coins confirms a different approach by the two groups.
Over 60s invest the largest amounts
A survey by the Korea Financial Investors Protection Foundation of 2530 Korean adults in December 2017 demonstrated a zealous streak among older Koreans for cryptocurrencies.The biggest investors were in the 60-plus age group, speculating with far larger amounts than other demographics.
People in their 60s invested larger amounts than any other age demographic, averaging $6,194 per investor. Kwon Soon-chae, a Foundation senior analyst, put it simply: “The older the investor, the larger the investment,” he said, speaking to Korea Joongang Daily.
While the figures might point to an impressive uptake of new technology by older Koreans, Soon-chae is worried that the motives are actually not good and fears older Koreans risking their pension and other life savings on cryptocurrency speculation.
21% of those over 60 invest $9,400
It also emerged from an analysis of the respondents’ answers that around 23 percent of South Koreans 20 years and older have sampled buying cryptocurrencies.
The 30-something demographic isn’t far behind at 19 percent. Interestingly, digital coins score a near-miss in the intervening demographics, with an investment likelihood of about 12 percent for people in their 40s and a lowly 8 percent scored by the 50 – 60 demographic.
Further complicating extrapolating the figures into meaningful data is the fact that the 20-something invests on average $2,700 against the 30s and 40s who invest an average of $3,700.
Still leading the pack are the 60-somethings, at $6,194 mean investment. The 60-something demographic is investing an average minimum of around $3,000, with a notable 21 percent investing much more – around $9,400.
Of the Koreans in their 50s, less than 10 percent invested at this level. Also within the younger 20-30 demographic, around 40 percent invested less than $1000. An interesting statistic, as 30 percent of millennials opt for cryptocurrency as opposed to traditional investment methods.
Respectable asset status coming at a price
After the December 2017 explosive hype around Bitcoin, it seems the potential of cryptocurrencies as a mainstream asset is currently weaving its way through pending legislation, banking sector reticence, outright bans in some parts of the world as well as a new sobriety among investors, based on all of the above.
Enthusiasts are broadly optimistic that Bitcoin, for example, is now climbing slowly with manageable, typical slumps and resurgences associated with other more established, respectable asset classes. On the flip side, there’s no denying that the regulatory stick has broadly dampened enthusiasm.
Perhaps most tellingly, the most significant figure for many that emerged from the survey was that only around 6.4 percent of respondents remained invested in cryptocurrencies. About a third of respondents – 31.3 percent – had never invested in digital currencies.
A difficult moment of regulation and speculation
As regulators in South Korea and the world over ponder the formulation of stricter controls on cryptocurrency, enthusiasts are alarmed by other figures emerging from the KFIPF survey.
Only seven percent of respondents said that they planned to continue investing in digital coins, with a further 23.1 percent admitting reluctance on the issue. A majority of 70 percent indicated they had no plans of investing in cryptocurrency at all, whether or not they previously had.
The extreme volatility of digital currencies was cited as the second most important contributor to investors’ reluctance, with the intimidating nature of legislators’ salvos firing off every so often also generating extreme caution in some circles.
Feature image by Nick Slater