South Korea: 40% of Students Investing in Cryptocurrency
According to reports from South Korean media outlet “Delighti,” a recent survey by the Korea Investment & Securities (KIS) reveals a surprising trend among university students: nearly half are turning to cryptocurrency as a lifeline to tackle mounting debts and economic challenges. This unexpected shift highlights the severity of student debt crises, compelling young people to adopt innovative yet high-risk financial strategies in pursuit of economic stability and independence.
The survey indicates that 40% of students surveyed are investing in cryptocurrencies like Bitcoin, with a notable interest in stocks listed on the New York Stock Exchange, and 89% planning to diversify their portfolios soon. This reflects a lack of confidence among Korean youth in the local stock market, with many citing greater volatility compared to international markets.
Research also shows a gradual improvement in financial literacy among students, with an increasing number starting investments early. Over half of the respondents reported beginning their investment journey in the past three years, with many investing substantial amounts exceeding $7,180.
Debt and economic pressures escalate: “Squid Game” becomes reality
In the popular TV series “Squid Game,” fictional contestants face dire consequences due to massive debts, driving them to participate in risky games to win large sums and pay off their debts. In reality, South Korean youth are under similar economic pressures, forced to take extreme measures akin to the characters in the series to manage financial responsibilities.
Economic pressures in South Korea are intensifying, particularly with rising housing and living costs, burdening many young people with heavy debts. These pressures are exacerbated by the monetary tightening policies of South Korean banks. Young people often rely on education loans to cover tuition and living expenses, with educational debt growing faster than other types of consumer debt.
According to the latest survey data, in 2021, over one-fifth of households aged 19 to 39 had debt-to-income ratios exceeding 300%, compared to just 8% in 2012. This figure is expected to rise further by 2024. This financial strain disproportionately affects dual-income households, families with children, and low-income groups in the Greater Seoul area, highlighting the widening socioeconomic gap in the region.
Coupled with South Korea’s severe aging population issue, many young people lack confidence in systems such as retirement funds, savings accounts, and the domestic stock market. In April, a survey targeting the 20-39 age group found that over three-quarters of South Koreans in this demographic “distrust” the retirement pension provided by the government.
The Future of Cryptocurrency in South Korea
Faced with escalating debt crises, more and more young South Koreans are opting to invest in cryptocurrencies, hoping to improve their financial situations through high-risk, high-return investments, which remain a primary reason for choosing cryptocurrencies.
The future outlook for South Korea’s cryptocurrency market appears promising yet uncertain. Despite government efforts to enhance transparency and security through policy changes, the allure of high returns may continue to attract students burdened with debt.
South Korea plans to launch a system focused on cryptocurrency asset management by 2025 to combat tax evasion and monitor illegal transactions. Ongoing policy changes aim to regulate cryptocurrency exchanges, ensuring investor protection, which could influence the future popularity and feasibility of cryptocurrencies as an investment option in the country.
With South Korean students’ growing interest in cryptocurrencies amid severe economic pressures, the seriousness of the student debt crisis is underscored. As young people explore the cryptocurrency market, emphasizing responsible investment practices and financial education will be crucial in helping them secure their financial futures in the ever-evolving cryptocurrency industry.
Article co-published with: CryptoCity
