What makes Asia the target of crypto market?

Bitcoinus
Bitcoinus
Aug 31, 2018 · 5 min read

There is no wonder why blockchain is expected to bring life-changing innovations, which could modify the manner of how we live and interact in our daily lives. All over the world it is massively believed that the success of blockchain technology will lead in a new system in terms of banking, governance, real-estate, healthcare, and the list goes on. The region of Asia now is more than prepared to guide the way by embracing reasonable regulations, engaged with more awareness and education about this technology.

Asian customers are early digital money adopters

Cryptocurrencies have always had a cult following from Asia, especially in China, Japan, and South Korea. Morgan Stanley reports that these three countries account for the majority of the global cryptocurrency volume exchanged on a daily basis. The general population in Asia holds more funds in cryptocurrency coins versus converting them back into a fiat currency. If statistics are to be believed, cryptocurrency trading platforms are gaining popularity at a much faster rate in Asia compared to the rest of the world. The rising individual wealth in Asia, particularly in China and South Korea is also improving the performance of digital money.

Early cryptocurrency adoption began in Asia, particularly in Japan. It was the first country in the world to accept Bitcoin as an official form of payment. Japan’s decision with Bitcoin in late 2017 is leading the way for other countries in Asia to follow the suit. Recent research has shown that the majority of Bitcoin’s trading with fiat happens in official Japanese currency. Compared to 21.8 percent in USD, 55.7 percent of all Bitcoin fiat trading is in JPY.

It is estimated that more than one-third of South Korea’s salaried population invest in cryptocurrency. Each investor has approximately $5,000 in different crypto coins. South Korea is the third largest market in the world for trading cryptocurrency. There are concrete reasons behind why Asia leads the race in this regard.

There are many regions in Asia which have directly embraced digital currencies as opposed to using credit cards. For example, in 2016 more than 60% of the 600 million Southeast Asian population didn’t have bank accounts and less than 5% had credit cards. A significant portion of the Southeast Asian population receives paychecks from foreign countries. Cryptocurrency use significantly reduces foreign transaction fees. This kind of savings encourage a far higher number of early adopters within the Asian population.

The Asian population is over 4 Billion, which makes it one of the most densely populated areas of the world. If you will look from a business perspective, this means more speculative investors willing to risk. A new study revealed that the average customer in the Asia-Pacific region spends from $10000 to $100,000 compared to $1000 in the United States. With South Korean exchanges overgrowing traditional stock markets, many people including some government officials believe that cryptocurrencies could replace fiat sometime in the near future.

Asia has an important advantage to stay ahead

The governments in South Korea, Hong Kong, Japan and even China have all shown varying levels of support for cryptocurrency. Compared to adoption rates in the United States, it is calculated that Asian customer adoption rates are almost tenfold. Much of this has to do with the national government’s approach towards digital money in Asia compared to the rest of the world. For instance, there is a definite lack of clarity for cryptocurrency regulations in the United States. This makes the U.S. market, an unstable to enter because of the lack of any specific regulations. In comparison with Asia, here regulations are more explicit.

Another important factor is the degree of knowledge of cryptocurrency technology in Asian countries compared to other nations. In general, Asian customers have much more of an understanding and education regarding this innovative technology. The enormous potential of services based on blockchain technology further legitimizes it as a long-term investment.

Global economy is already affected by Asia’s decisions

An obvious remark is that a region with such a high percentage of digital money users would impact the overall global economy. Despite the blockchain technology is still in its initial stage, Asia is looking forward to play a main role in increasing blockchain usability. One striking example is the petrochemical industry. Some countries are already starting to break away from using the U.S. dollar as a standard for transactions. They began to look at digital money and other means of digital payment as a solution. A good example here is Venezuela’s “Petro” cryptocurrency, which is backed by the oil reserves of the country.

An outstanding number of nations are now trying to come up with an alternative digital reserve currency, with the major aim of dethroning the U.S. dollar. China is already planning to introduce its own version of Bitcoin to replace the Renminbi as the national currency.

Singapore has also become the center of crypto, because of its extremely linked nature and connection to global trade flows. Singapore is a fundamental unit in the trading of gas and oil and is looking to further expand in blockchain implementation.

Merchants have already noticed rich fields of the crypto market

Countries in Asia had already showed their openness to cryptocurrencies, with a thriving trading scene and active cryptocurrency communities. Therefore we can state that the existing popularity of cryptocurrency in Japan, South Korea and other countries have laid the way for merchant adoption. Whilst the rest of the world has yet to follow the suit in a significant way, it does show that approach is shifting towards using cryptocurrencies as a medium of transfer.

As it’s clear from various data recorded all year long that countries like South Korea, Japan, and Singapore have dominated the cryptocurrency economy, businessmen now has the best opportunity to gain profits and expand to these areas of the world. While blockchain technology and digital money is moving forward, so does the companies incorporating this technology.

The main idea of including cryptocurrencies in business activity is to attract the new customer segment. Gaining competitive advantage on your niche is necessary for further business development. Yoshitaka Kitao emphasized: “There’s a lot of speculative demand around cryptocurrencies, which is why the price is going up so quickly, but people need to think about how these technologies are being used in real life and how they can improve people’s businesses.”

That being said, blockchain presents an opportunity to participate with life-changing innovative technologies, which could affect our daily lives. The future is never certain, but it’s clear the Asian market has a potentially immense upside for business and individual investor growth in cryptocurrencies. At the recent Token Summit, Nick Tomaino spoke: “It could be argued that Asia is kind of the most important part of the world in terms of cryptocurrency.” It will be thrilling to see what growth Asia will contribute to the crypto asset economy over the next few years.


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