Eastern Asia is emerging as a significant player in the global crypto economy, ranking sixth in terms of value received between July 2023 and June 2024. Chainalysis reports that the region accounted for over $400 billion in on-chain value during this period, with a majority of transactions being large transfers through centralized exchanges. This suggests that institutional and professional traders are driving activity in Eastern Asia’s crypto market.
The presence of institutions on decentralized exchanges and other decentralized applications is also notable in the region. Chainalysis speculates that institutional investors may be leveraging market inefficiencies through decentralized platforms, which offer more arbitrage opportunities with price divergences. South Korea in particular stands out as the country with the largest transaction value in Eastern Asia, with nearly $130 billion in crypto value received. This is attributed to South Koreans’ mistrust of traditional financial systems and the efforts of large companies like Samsung in promoting crypto as a viable investment.
On the other hand, Hong Kong has emerged as a crypto hub in the Greater China region, benefiting from China’s strict stance against crypto investments. Following China’s ban on the industry in 2021, Hong Kong has been absorbing demand for crypto trading. The region has seen significant year-over-year growth at 85.6% and ranks 30th globally in terms of crypto adoption. The positive regulatory environment in Hong Kong has attracted institutions looking to tap into the demand from Chinese markets, especially after the approval of spot crypto-related exchange-traded funds (ETFs).
Kevin Cui, CEO of OSL, a provider of institutional-grade crypto services, noted that Hong Kong is experiencing growing institutional interest in digital assets. He highlighted the regulatory framework in the region, which has provided a regulated pathway for investment in digital assets through ETFs. This shift marks a transition from traditional financial instruments toward more direct engagement with digital assets in Hong Kong’s evolving crypto market. Overall, institutions and professional traders are driving the growth of Eastern Asia’s crypto economy, with South Korea and Hong Kong leading the way in the region.
