Institutional Players Driving Crypto Adoption in Eastern Asia

By: Isha Das

Eastern Asia has distinguished itself as the sixth largest crypto economy on the globe, propelled by robust institutional activities in South Korea and Hong Kong. As per a report by Chainalysis, between July 2023 and June 2024, the region accounted for 8.9% of the global on-chain value, exceeding $400 billion.

An impressive 64.7% of this value was attributed to large transfers via centralized exchanges, indicating a significant contribution from institutions and professional traders. This includes not just big players on centralized platforms, but also substantial activity on decentralized exchanges (DEX) and decentralized applications (dApps).

South Korea stands out prominently with the highest transaction value in the region, receiving close to $130 billion in crypto during the mentioned period. The local perspective attributes this to the widespread mistrust in traditional financial systems, coupled with encouragement from tech giants like Samsung, making crypto an attractive investment here.

Locals and institutions in South Korea often use local exchanges to handle their initial investments and then shift their assets to global platforms, displaying a dynamic use of both centralized and decentralized applications.

Meanwhile, Hong Kong's emergence as a crypto hub has been facilitated by China's aggressive bans on crypto investments, thus channeling significant demand towards Hong Kong. Regulatory clarity and a favorable stance towards digital assets have fostered an environment that saw an 85.6% growth year-over-year, and Hong Kong now ranks 30th globally in crypto adoption.

The presence of a structured regulatory framework and the recent approvals of spot crypto ETFs have intensified institutional interest. These developments provide a regulated pathway for investment in digital assets, which is attracting more capital inflows into the region.

Experts from the crypto industry note that the accommodating regulatory ecosystem and initiatives by local fintech companies in Hong Kong will continue to drive significant institutional adoption, providing a gateway for Chinese market demands via Hong Kong.