A person checks the price of a bitcoin on a smartphone at Korea's largest cryptocurrency exchange operator, Upbit, in southern Seoul, Thursday. Yonhap
The surging price of bitcoin to a record level in Korea is prompting renewed calls for the easing of regulations on digital assets, in order to give investors more opportunities to make profits.
In January, financial regulators in Korea chose to maintain digital assets separate from the traditional securities market. This decision came at a time when the U.S. Securities and Exchange Commission (SEC) made a historic ruling allowing spot bitcoin exchange-traded funds (ETFs) on SEC-regulated market exchanges.
ETFs are only available for trading on the traditional securities market.
Under the circumstances, bitcoin traded above 89 million won ($66,700) at Korea's largest cryptocurrency exchange operator Upbit, as of 4 p.m., Thursday. The market is open around the clock.
It surpassed the previous record of 82.7 million won set on Nov. 9, 2021, and peaked at 83.45 million won, Wednesday.
The price of the world's most popular cryptocurrency has correspondingly surged more than 40 percent in Seoul since the beginning of the year. This increase has been propelled by the rise in trading volume of spot bitcoin ETFs globally.
This year also marks a halving, which occurs every four years and involves the reduction of the number of new bitcoins available for circulation by half. This phenomenon typically leads to an increase in the value of the coin.
“Taking this bitcoin rally into account, we expect the corresponding market to become more bullish if the financial regulators soften rules on digital assets,” a person with the username “I only live once” wrote in an open chatroom for bitcoin investors.
Regarding the SEC decision in January, the Financial Services Commission (FSC) has opted not to permit spot bitcoin ETFs. This decision was made in the interest of safeguarding investors from highly-volatile assets.
Another chatroom user, “A prophet,” called the FSC's measures “too outdated in the era of fast-evolving digital finance.”
er argued that the regulator should "abandon the closed-door policy for bitcoin investors in Korea, in order for investors to maximize profits," particularly in light of bitcoin approaching an all-time high of $68,789 set in November 2021 in the U.S., which could potentially have a positive impact on other countries' markets.
Hong Ki-hoon, a professor at Hongik University's College of Business, said financial authorities “might fall further behind the international trend concerning digital assets” if it insists on its current rule.
He highlighted that following its decision in January, the SEC is currently deliberating on whether to classify Ethereum, the world's second-largest cryptocurrency, as a security and approve the trading of Ethereum ETFs, potentially by May.
“If realized, Korea will be steps behind the U.S. in acknowledging bitcoins and other forms of digital assets to be traded as traditional securities,” the professor said.
Some advocates of digital assets project the financial regulator will be pressed to revise relevant regulations after the April 10 general elections as both rival parties are open to allowing spot bitcoin ETFs.