Cumulative investment climbs from 543.85 billion to 972.92 billion won in 8 months

Upbit accounts for 92% of total; Coinone posts fastest growth

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South Korean investors have steadily increased their use of digital asset accumulation services this year, even as prices for major cryptocurrencies such as Bitcoin and Ethereum have struggled. Cumulative investment in so-called "accumulation" services — which allow users to automatically purchase digital assets at set intervals — has grown nearly 80 percent this year, approaching 1 trillion won ($747 million).

Data submitted to Park Sang-hyeok, a Democratic Party of Korea lawmaker on the National Assembly's Political Affairs Committee, by South Korea's five major digital asset exchanges — Upbit, Bithumb, Coinone, DigitalEx and Gopax — showed that three of them, Upbit, Coinone and DigitalEx, had combined cumulative investment in accumulation services of 972.92 billion won as of the end of August. That represents a 78.9 percent increase, or 429.07 billion won, from 543.85 billion won at the end of last year, over just eight months.

The accumulation service lets users preset the digital asset they want to buy, along with the frequency and amount, and the platform then purchases it automatically. Rather than investing a lump sum at a single point in time, users spread purchases over regular intervals to reduce exposure to price swings. Among South Korea's five major won-denominated exchanges, Upbit, Coinone and DigitalEx are the three that currently offer the service.

Investment was heavily concentrated at Upbit. The exchange's cumulative accumulation investment reached 897.71 billion won, accounting for 92.3 percent of the total — an increase of 402.65 billion won, or 81.3 percent, from the end of last year.

Other exchanges also saw growth. DigitalEx's cumulative investment rose 31.3 percent over the same period, from 48.18 billion won to 63.26 billion won. Coinone posted the highest growth rate of the three, surging roughly 19.6-fold from 610 million won to 11.95 billion won.

User numbers also rose sharply. The three exchanges combined had 337,119 cumulative accumulation service users as of the end of August, up 91,808, or 37.4 percent, from the end of last year. Upbit accounted for the largest share at 296,675 users, followed by Coinone with 29,462 and DigitalEx with 10,982. Coinone stood out in particular, with its user base expanding 166.2 percent.

The trend is notable given that major digital asset prices have been weak this year. According to CoinMarketCap, Bitcoin was down 5.3 percent from the start of the year and Ethereum had fallen 15.7 percent as of 9 a.m. Sunday.

Staking services — which allow users to deposit digital assets in exchange for rewards — showed a more mixed picture, with investment levels diverging across exchanges even as overall user numbers grew.

Upbit's cumulative staking users reached 365,121 as of the end of August, up 20.4 percent from the end of last year. However, cumulative investment fell 501.6 billion won, or 4.3 percent, to 11.23 trillion won over the same period. DigitalEx also saw its user count rise 11.3 percent while its investment declined 14.1 percent.

Bithumb and Coinone recorded gains in both users and investment. Bithumb's cumulative staking investment reached 1.33 trillion won, up 24 percent from the end of last year, while Coinone's rose 10.9 percent to 316 billion won. Over the same period, the two exchanges had 374,326 and 341,992 cumulative users, respectively.

Staking investment figures are not directly comparable across exchanges, however, as each uses a different methodology. Upbit, Bithumb and Coinone calculate based on fixed-term staking, while DigitalEx — which offers only flexible staking — uses customer asset balances as its basis.

The age breakdown of users also differed by service. Among Upbit's accumulation service users, those in their 30s made up the largest share at 30.4 percent, followed by those in their 40s at 27.1 percent and those in their 50s at 20.9 percent. Staking users at Upbit were similarly concentrated among those in their 30s (32.0 percent) and 40s (30.1 percent).

DigitalEx, by contrast, skewed older. Users in their 50s accounted for the largest share of its accumulation service customers at 30.7 percent, followed by those in their 40s at 30.1 percent. The same pattern held for staking, where users in their 40s (33.8 percent) and 50s (28.4 percent) formed the core user base.


kyoung@heraldcorp.com