Young investors responsible for extreme fluctuation of coin markets
Arowana Token was listed this week on the Korean market with a starting price of 50 won. And in half an hour, the value jumped more than 1,000 times to 53,800 won.
The token is issued for blockchain technology-based transactions of gold.
Behind such extreme movements are young investors in their 20’s and 30’s, according to Rep. Kwon Eun-hee from the minor opposition People’s Party on Wednesday.
The third-term lawmaker checked the new customers of the country’s four biggest cryptocurrency exchanges during the first quarter of this year.
Among around 250 newcomers, 32.7 percent were 20-somethings while 30.8 percent were 30-somethings. The proportion of minors was 1.5 percent.
And younger investors were more aggressive as minors almost quadrupled their deposits for cryptocurrency investment during the first three months of 2021.
By contrast, those in their 20s and 30s more than doubled their deposits, respectively.
“The youth unemployment rate is high. And our young generations are angry at the rising house prices. Against this backdrop, they seem to think that cryptocurrency is their only opportunity. FOMO is driving them to bet on the coin market, which is becoming gambling,” Prof. Lee Phil-sang from Seoul National University said.
“This is a really big problem. The country should feel a sense of urgency and do everything to stop this. Otherwise, our youngsters may face big problems when the cryptocurrency market turns bearish.”
Resentments of young generation
Short for fear of missing out, FOMO refers to the uneasy and all-consuming feeling that others might be making big money and having fun while they are not present.
The country’s youth unemployment rate was 10 percent as of the end of this March compared to the overall rate of less than 4.5 percent.
And the young generations have expressed their resentment toward the overly bullish real estate market over the past few years, thinking that only the older generations with apartments benefit.
Rep. Kwon lashes out at the incomplete Korean regulation system as the country does not have any ministry or agency in charge of cryptocurrencies.
“Due to the economic difficulties and the high jobless rate, young people rush to the cryptocurrency market, and some suffer from great losses,” the lawmaker said.
“The government is required to set up a sophisticated system to do away with blind spots of the regulations.”