Similarities and differences between Korean and Japanese crypto markets and what to expect in the future.

Koji Higashi
Aug 26, 2017 · 7 min read

I came across this Forbes article regarding the popularity of cryptocurrencies in Korea the other day and found it fascinating.

I had already known that the trading volume for cryptocurrencies in Korea shot up significantly as of late but I had little clue as to what was causing or at least influencing the surge. Now, thanks to the article, I understand the Korean crypto phenomena a little bit better and also spotted interesting similarities and differences between Korean and Japanese markets in terms of altcoin popularity, general sentiment, regulation and more.

I believe these countries will be two of the more important markets for the cryptocurrency space to keep an eye on for the coming months and maybe even years as they may affect not only traders and investors but also potentially the direction of development and broader trends in the space for the foreseeable future.

Similarities between Korea and Japan

I could find at least three notable similarities between the two countries.

1. Popularity of altcoins

One of the biggest similarities is the popularity of altcoins. Ethereum and Ripple are very popular in Korea while Ripple and NEM are the local favorites in Japan. I cannot attach a single reason as to why people are in love with those particular alts, but I found the comment by Mr. Lim in the article informative here.

“Koreans watched Bitcoin gain momentum from afar in the U.S. in 2012, but the first Bitcoin exchange hub Korbit launched over a year later when the coin was already too pricey.”

I can certainly relate to this and feel there is a similar sentiment in Japan, too. Even if you buy into Bitcoin now, you cannot possibly expect 100 times return anymore in a few months or maybe even in years. Bitcoin looks like a “stable” and “conservative” cryptocurrency for newer hungry investors and a lot of them find altcoins more attractive for that reason.

While Bitcoin is still the most popular cryptocurrency with the most usage and exposure in Japan, I see many new users go directly from fiat to altcoins and never bother to get into Bitcoin. I’d imagine the situation is very similar in Korea.

2. Decentralized, what?

Another notable similarity is that a general lack of interest or appreciation for the fundamental concept of “decentralized” and “leaderless” cryptocurrencies.

As Mr. Lim points out, Korean people often prefer something(whether it’s a company, project or cryptocurrency) with visible and strong leader(s) to leaderless decentralized systems such as Bitcoin.

Plus, Vitalik Buterin, the founder of Ethereum, seemed to understand the value Koreans place in face-to-face relationships. He took pains to meet with Korea’s crypto currency enthusiasts, building necessary confidence and putting a face to the investment where Bitcoin — whose architect is still unknown — had none, Lim adds.

The same formula applies to Japanese cryptocurrency investors, too. They simply don’t seem to care about the original concept of Bitcoin much. Rather, the presence of visible leaders and/or endorsement from the authority or famous corporations give them more confidence and centralization is often considered more favorable due to the trust they place on the authority. The concept of leaderless currency feels very foreign to many regular people and it has traditionally appealed to only a relatively small segment of investors.

When Vitalik visited Tokyo Bitcoin Meetup recently, we saw a record number of attendees (ironically!) and the venue was filled with enthusiasts and investors. One person who attended the event told me that “he was literally like a rock star in there.”

Photo in courtesy of @BFM33211

3. Strong desire for speculation as investor literacy continues to dip

“People are crazed over it. Grandpas and grandmas come to our office lobby and say they want to put half a billion won ($447,000) … but they have no idea how to use the app or email.”

As Mr. Lim states as well as I have laid out in my previous article, the level of understanding and literacy among cryptocurrency investors is declining as it goes more and more mainstream in Japan as well.

While this can be considered a positive step toward mainstream adoption, I still have a little bit of concern as they often fall prey to scammy altcoins, ICOs and get burned by coordinated pump&dumps and insider trading that are common in the brutal crypto space.

Key differences

There is a few notable differences between the two countries on the other hand.

1. Regulation

Starting this spring, cryptocurrencies have been officially recognized and regulated in Japan. This was a big tipping point for the market and the trading volume of bitcoin has steadily been increasing since the outline for regulation was released by the ministry of finance last December.

Although new legal framework for cryptocurrencies has been recently proposed in South Korea as well and it will likely follow Japan’s suit soon, the presence of regulation at this moment is a key differentiator of the two markets in my opinion.

2. Adoption

Regulation of cryptocurrencies not only boosted the trading volume but also helped with adoption tremendously in Japan so far.

I cannot really speak for the Korean market myself but Bitcoin and cryptocurrencies in general have been receiving a significant amount of media exposure and are turning into a household topic as of late in Japan. TV and other mainstream media are talking about Bitcoin literally every day and I don’t feel “safe” (or maybe just a bit embarrassed…)anymore wearing a bitcoin shirt in public anymore as many people at least recognize the symbol now.

Merchant adoption has picked up the speed even faster and a number of big-name corporations started experimenting with cryptocurrencies and blockchain technology even more eagerly. Skepticism toward Bitcoin is certainly still there, but media exposure and backing from famous companies are pushing them to mainstream further by the day. Japan may be the most progressive country in the world in terms of media exposure and mainstream adoption now.

Bic Camera, one of the biggest electronics retailers in Japan(consider it Fry’s of Japan) started accepting Bitcoin and the impact was enormous.

3. ICO fever

We are seeing a big ICO fever forming right now in Japan.

The project that’s leading this trend is Comsa, recently announced by Tech Bureau, the company behind the prominent Japanese exchange “Zaif” and the NEM-based private blockchain solution “Mijin”

Comsa aims to become the de facto ICO platform where interested companies and projects can easily hold ICOs in a more responsible and effective manner at the same time protecting ICO investors by filtering out low quality projects.

According to their whitepaper, it is also going to offer other features such as multichain atomic swap and price stable coins through the comsa platform, augmenting the value proposition of ICO tokens. As a few notable Japanese companies have already declared that they are going to hold their ICOs on the platform in the near future, Comsa has made a big splash and more than 60 thousand people have signed up already.

ICOs had always been sort of popular in Japan but that was mostly limited among crypto enthusiasts up until recently. Now, in my personal observation, Comsa has solidified the ICO fever in Japan and it has started attracting even people outside the crypto community.

I’d assume Korea is probably experiencing something similar now but my educated guess is that the scale of the hype in Japan is bigger thanks to regulation and increased media coverage and lots of the momentum seem to have moved on from altcoin trading to ICO investment now.

Takeaways and what to expect in the future

Finally, what are the important takeaways from this comparison and what should we expect out of these countries going forward?

Keep an eye on cryptocurrency regulation in Korea

After witnessing what has been transpiring in Japan post regulation and given similarities of the two cultures, I’d predict that (anticipation for) regulation will spark more adoption and boost the trading volume even further in Korea. The cryptocurrency, especially altcoin fever, seem to have calmed down a bit now in Japan but the Korean cryptocurrency mania may not even have started yet.

ICO fever moving to Asia

Recent ICOs are a little out of control in my opinion, but as more and more people get exposed to the hype, even more money will flow into ICOs in the very near future, especially from Asian markets (Japan, Korea, and China) The recent SEC comment and stricter law in the United States is also playing a big factor here (Recent ICOs often exclude US investors for one)

Am I excited about this trend? Not so much, but it is what it is.(You can read my article about why I feel ICOs are flawed)

Evolution of the space and tendency toward more centralization

I have pointed out before that sharp price increases of some altcoins are not really based on mid to long term outlook but rather on a short term excitement and FOMO. But it’s also true the same group of people have power to shape the market by determining the market price and may even affect the direction of development in some cases.

For example, more than half of Bitcoin Cash(BCH) trading volume is from Korea and this BCH speculation directly affects the price, mining difficulty and even BTC’s future direction to some degree.

(Why is BCH popular in Korea? Bitcoin Seoul points out that Bitcoin Cash sounds better on paper(cheaper, faster, more user-friendly and Jihan played his card well etc.) Japanese are not so crazy about BCH so far though)

In short, whether we like it or not, speculation as well as regulation are slowly dictating the direction of the entire space. This trend will continue and get even stronger as cryptocurrencies go more mainstream.


(I am planning to visit Korea sometime this Fall to meet local experts and do some more research myself. If I find something even more interesting, I’d likely write another article on this topic. Stay tuned.)

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Koji Higashi

Written by

Bitcoiner. I mainly write about the Japanese cyrptocurrency space and other projects that interest me. More about myself: https://www.kojihigashi.info/

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