Korean investors are flocking to the 'crypto stock' market, with Bitcoin mining company BitMine, backed by Peter Thiel, becoming the top target. This craze reflects the extreme desire of young Koreans for high-risk investments. This article is based on a piece by angelilu, published by Foresight News. (Background: The 'Korean Kimchi Premium' was once a spectacular phenomenon in the global cryptocurrency market. This country, with a population of only 51 million, once generated Bitcoin trading volumes that shook global markets. Although the government's strong regulation has made this premium phenomenon a thing of the past, the adventurous spirit of Koreans has not faded; they are just looking for new outlets.) Moreover, the main force behind this frenzy is not the big institutional players in Korea, but the younger retail investors betting on their futures. In this country of 51 million, up to 18 million people are active in the digital asset market, accounting for over one-third of the total population, and nearly a quarter of young people aged 20 to 39 view trading cryptocurrencies as their only chance to turn their lives around. BitMine is the latest trading target. According to data from Korean securities custodians cited by Bloomberg, Korean investors have poured a net capital of $259 million into BitMine stocks since July, making BitMine the top purchase on Korea's overseas stock buying list. BitMine is a U.S. Bitcoin mining company supported by 'Silicon Valley king' Peter Thiel, which has recently transitioned from Bitcoin mining to adopting ETH as its financial strategy, now holding over 1.15 million ETH worth over $4.96 billion, making it an important 'vault' holding ETH on Wall Street. Interestingly, Tom Lee, a key player in bringing ETH to Wall Street, is also a director of BitMine. Tom Lee is a Korean-American. After experiencing the bloody lesson from the LUNA coin crash, Korean investors' enthusiasm for risk assets has not diminished, and the appearance of a 'fellow countryman' from overseas who has achieved great success in the financial industry undoubtedly gains high trust and attention. For Korean retail investors, this is not just the perspective of an industry expert, but a call with national sentiment. This subtle cultural identity further strengthens their confidence and enthusiasm for the crypto market. Why not buy ETH directly? A key question arises: since they are optimistic about Ethereum, why not buy ETH directly but instead go around to buy BitMine's stock? Volatility may be the answer. Although cryptocurrencies are known for their extreme volatility, some retail investors may believe that participating through the stock market can provide a different risk exposure. In actual backtesting, ETH's price rose from $2,500 in July to $3,800, an increase of 52%. During this period, BitMine stock BMNR's price rose from $46 on July 1 to a peak of $135, with a maximum increase of 193%. However, as of the publication date, ETH has risen to $4,300, the highest level since December 2021, while BMNR's price has only slightly rebounded to $58.98. Risk-seeking Korean investors seem to prefer investment varieties with more volatility, even though this 'roller coaster' style of ups and downs can lead to countless retail investors falling from the clouds. However, the direct trading volume of ETH is also not low; just the largest exchange in Korea, Upbit, had an ETH trading volume of $111.1 billion in July, and net inflows are currently untraceable. BitMine is just a microcosm of the 'crypto stock' craze. However, this is not the first time Koreans have rushed to 'crypto stocks'; when stablecoin company Circle went public, it attracted the attention of Korean investors, with net purchases reaching $450 million in the month of Circle's IPO, pushing Circle's price-to-earnings ratio to 187 times, a figure far exceeding any reasonable valuation for traditional fintech companies. This frenzy has also swept through the local Korean market. The new government's crypto-friendly policies have filled retail investors with expectations, which is also part of the reason for pushing the Korean composite stock price index to nearly a four-year high. When the Bank of Korea announced the launch of a central bank digital currency (CBDC), retail investors sensed an opportunity. The stock prices of companies involved in projects like Kakao Pay and LG CNS seemed to shoot up like rockets in a short time. Kakao Pay's stock price doubled in just a month, while LG CNS closely followed, surging nearly 70%. When the frenzy eventually subsides, the craze for 'crypto-related stocks' in Korea is more a reflection of deep social phenomena than financial phenomena. It reflects how young Koreans are urgently seeking non-traditional, high-risk breakthrough paths in an environment where traditional wealth accumulation channels are becoming increasingly narrow. As Hadick from Dragonfly warns, 'When the premium disappears, investors will quickly sell off stocks; these phenomena are usually short-lived.' The valuations of 'crypto-related stocks' that have been driven up by sentiment and speculation may essentially be a huge bubble. When the frenzy eventually subsides, who will be left exposed may only become clear at that time.

#SEC #CBDC #ETF #ETH