40% of Korean students invest in cryptocurrencies, according to a recent survey by Korean Investment Securities (KIS), as reported by Korean media outlet Delighti. This unexpected trend highlights the severity of the student debt crisis in Korea and forces young people to adopt innovative and high-risk financial strategies in hopes of achieving economic stability and independence.
The survey reveals that 40% of the interviewed students invest in cryptocurrencies such as Bitcoin, with a primary focus on stocks of companies listed on the New York Stock Exchange. Furthermore, 89% of the students express their plans to diversify their investment portfolios in the near future. This reflects the lack of confidence Korean youngsters have in the local stock market, with many students stating that the local market is more volatile.
The study also shows that the financial literacy level of students is gradually improving, with an increasing number of young people starting to invest early. More than half of the respondents indicate that they began investing in the past three years, with many investing substantial amounts of over $7,180.
Debt and economic pressures escalate: “Squid Game” becomes reality
In the popular TV series “Squid Game,” fictional participants face dire consequences due to massive debts, forcing them to participate in dangerous games to win huge sums of money and repay their debts. In reality, Korean youth face similar economic pressures, with many resorting to extreme measures to cope with their financial responsibilities, much like the characters in the show.
Economic pressures in Korea are increasing, particularly with rising housing and living expenses, leading to a significant burden of debt for many young people. These economic pressures are even more pronounced under the currency tightening policies of Korean banks. Young people often rely on student loans to pay for tuition and living expenses, but education debt is growing at a faster rate than other types of consumer debt.
According to the latest survey data, in 2021, more than one-fifth of households aged 19 to 39 have a debt-to-income ratio exceeding 300%, compared to only 8% in 2012. This figure is expected to further rise by 2024. This financial predicament particularly affects dual-income households, families with children, and low-income individuals in the greater Seoul area, highlighting the increasing socioeconomic disparities in the region.
Coupled with the pressing issue of Korea’s aging population, many young people lack confidence in retirement pension services, savings accounts, and the domestic stock market. In April, a survey targeting the 20-39 age group found that over three-quarters of Koreans in this age range “distrust” the retirement pension provided by the government.
The future of cryptocurrencies in Korea
Faced with an expanding debt crisis, an increasing number of young Koreans are choosing to invest in cryptocurrencies, hoping to improve their financial situation through high-risk, high-return investments. The main reason they choose cryptocurrencies is the potential for high returns.
The future outlook for the Korean cryptocurrency market appears promising but also uncertain. Despite the government’s efforts to increase transparency and security through policy changes, the allure of high returns may continue to attract students burdened with debt.
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 and ensure investor protection, which may impact the future popularity and feasibility of cryptocurrencies as an investment option in the country.
In the face of severe economic pressures, the surge of interest in cryptocurrencies among Korean students reflects the seriousness of the student debt crisis. As young people explore the cryptocurrency market, emphasizing responsible investment practices and financial education will be crucial to help them secure their financial future in the ever-changing cryptocurrency industry.
This article is a collaborative repost from Cryptocity.