BitMine Tops July's Korean Overseas Stock Purchase Ranking.
Written by: angelilu, Foresight News
A crypto trading fever has quietly surged into the "stock market" in Korea. The "Kimchi Premium" was once a global cryptocurrency market spectacle. This country with only 51 million people once generated Bitcoin trading volumes that could shake the global market. Although government's strong regulation has made this premium a thing of the past, the adventurous gene in Koreans has not faded, but is seeking new outlets.
Moreover, the main force of this wave is not Korean institutional giants, but young retail investors betting on the future. In this country of 51 million people, up to 18 million are active in the digital asset market, exceeding one-third of the total population, and nearly a quarter of young people aged 20 to 39 view crypto trading as their only chance to turn their lives around.
BitMine is the Latest Trading Target
According to Bloomberg citing Korean securities depository data, Korean investors have injected $259 million in net funds into BitMine stocks since July, pushing BitMine to the top of Korea's overseas stock purchase ranking.
BitMine is a US Bitcoin mining company supported by "Silicon Valley King" Peter Thiel, recently transitioning from Bitcoin mining to adopting ETH as its financial strategy, now holding over 1.15 million ETH worth more than $4.96 billion. This makes it an important "vault" holding ETH on Wall Street. Interestingly, Tom Lee, a key figure in bringing ETH to Wall Street, is also a board member of BitMine.
Tom Lee is a Korean-American. After experiencing the bloody lesson of LUNA's crash, Korean investors' enthusiasm for risky assets has not diminished. The appearance of an "insider" who has achieved great success in the financial world overseas naturally gained extremely high trust and attention. For Korean retail investors, this is not just an industry expert's perspective, but a call with ethnic emotional resonance. This subtle cultural identity further strengthened their confidence and passion for the crypto market.
Why Not Directly Buy ETH?
A key question emerges: If bullish on Ethereum, why not directly buy ETH, but instead go around to buy BitMine stocks?
Volatility might be the answer. Although cryptocurrencies are known for extreme volatility, some retail investors might believe participating through the stock market offers a different risk exposure.
Actual backtesting shows that ETH's price rose from $2,500 to $3,800 in July, a 52% increase. During the same period, BitMine stock BMNR's price rose from $46 on July 1st to a high of $135, with a maximum increase of 193%.
However, by the time of writing, ETH has risen to $4,300, its highest level since December 2021. BMNR's price has only slightly recovered to $58.98. Korean investors with high-risk appetites seem to prefer more volatile investment products, though this "roller coaster" rise and fall can make many chasing high prices fall from the clouds.
In fact, ETH's direct trading volume is not low. Korea's largest exchange Upbit's ETH trading volume for the entire month of July was $111.1 billion, with net inflow yet to be calculated.
BitMine is Just a Glimpse of the "Crypto Stock" Frenzy
However, this is not the first time Koreans have rushed to "crypto stocks". When the stablecoin company Circle went public, it already attracted Korean investors' attention. In the month of its listing, net purchases reached $450 million, driving Circle's price-to-earnings ratio to 187 times, far exceeding any traditional fintech company's reasonable valuation.
This fever also swept through the Korean domestic market. The new Korean government's crypto-friendly policies have filled retail investors with anticipation, which is also part of the reason the Korean comprehensive stock index rose to a four-year high. When the Korean central bank announced the launch of a digital currency project (CBDC), retail investors sensed an opportunity. Companies like Kakao Pay and LG CNS participating in the project seemed to ride a rocket. Kakao Pay's stock price doubled in just a month, while LG CNS followed closely, surging nearly 70%.
When the Fever Finally Subsides
Korea's "crypto-related stock" fever is more a reflection of a deep social phenomenon than a financial one. It reflects how young Koreans are eagerly seeking non-traditional, high-risk breakthrough paths in an environment where traditional wealth accumulation channels are increasingly narrow.
As Dragonfly's Hadick warns: "When the premium disappears, investors will quickly sell stocks, and these phenomena are usually short-lived." The valuations of "crypto-related stocks" pushed up by emotions and speculation may essentially be a huge bubble. When the fever finally subsides, who is swimming naked might only become clear then.
