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Desperation breeds speculation

Jan 20,2018
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I received many calls and text messages on Jan. 18, inquiring about my article on cryptocurrency the previous day. A friend who is a police officer said, “My coworkers are into cryptocurrencies lately. Many of them were devastated yesterday.” A source who works for a PR team texted, “Everyone is studying cryptocurrencies here.”

Cryptocurrencies are the hottest topic indeed. The success myths that someone retired after making billions of won from cryptocurrency trading have turned people in just about every profession into cryptocurrency investors. On Jan. 14, I met a 21-year-old cryptocurrency investor who is in the military. Since last November, he has traded cryptocurrency at the computer center in his unit after his routine is over. He lost more than half of his initial investment. He is not the only soldier who is into cryptocurrencies — the military have now had to ban cryptocurrency trading in computer centers.

Lately, cryptocurrencies are traded at a higher price than the global trade level in the so-called kimchi premium. It means that the demand for cryptocurrency investment is abnormally high. While Korea makes up about 1 percent of the global economy, the trade volume in won in the global cryptocurrency market is over 10 percent. On the extraordinary cryptocurrency boom in Korea, 50-year-old economist Wu Seok-hun, co-author of the book “880,000 won Generation,” said, “The premium suggests that young Koreans are struggling more than youngsters in other countries.” He diagnosed that the materialistic culture and uncertainty of the future led to the frenzy.

Each and every word from the government and financial authorities makes the cryptocurrency market fluctuate. One investor complained that the most powerful group that manipulates the price is the government, arguing “The establishment is ruining the new investment market we have found.” The petition board on the Blue House website gets many complaints.

Reporters interviewed a 33-year-old surnamed Kim who works for a large corporation. “If I don’t spend any of my salary and save, it will take 20 years to buy an apartment in downtown Seoul. It is a far-off dream.” The root of the unusual cryptocurrency boom originates from fading hopes among young people. What will the government say to the investors who want to be “saved,” not “regulated?” Inconsistent remarks are not the correct answer.

JoongAng Ilbo, Jan. 19, Page 29

*The author is a national news reporter of the JoongAng Ilbo.

HONG SANG-JI