More young South Koreans are buying cryptocurrency than ever before, with the number of 20- and 30-somethings investing tripling since 2020. However, this increase in optimistic purchasing behavior has come at a cost, with a substantial increase in juvenile bankruptcy claims reported during the same time period.
Demographic data on Upbit users shows that as of October 2020, over 1,796,000 individuals aged 20-39 have active accounts on Upbit.
That figure had risen to 5,394,000 by October 2021, and while data for this year is not yet available, with trading volumes spiking in the first few months of 2022, it is possible that the total has risen once more.
There has also been an increase in stock market activity – both domestic and international – among the same demographic bracket.
According to South Korea’s Financial Supervisory Service (FSS), a “rapid growth” in personal debt has paralleled the rise in investment. It spoke of a “frenzy of investment in stocks and cryptoassets” in the demographic cohort, which the South Korean media has called “2030.”
Low borrowing rates “before and after the spread of COVID-19,” according to the FSS, were a major contributing factor. However, financial experts have previously stated that crypto investment is “no longer optional” for young Koreans.
Spike in Young Crypto Buyers
Bullish bitcoin (BTC) and altcoin buying have come at a cost for younger South Koreans, who are now more likely to incur debt to fund their cryptocurrency and stock investments.
According to the same source, the number of people aged 20 to 39 who have borrowed from three or more financial institutions has climbed by more than 30% in the last five years.
For persons aged 20 to 29, the increase was 33% over the same time period.
All of these have resulted in an increase in personal insolvencies. According to Supreme Court data, the number of individual rehabilitation (bankruptcy) applications from people in their twenties increased from 10,307 in 2019 to 11,108 in 2020, eventually reaching 11,907 in 2021.
In the first six months of this year, 6,364 people under the age of 30 declared bankruptcy, with analysts predicting that over 12,000 more will declare bankruptcy before the end of the year.