fbpx

How to buy Bitcoin in South Korea

According to an aggregated volume data website listing 26 leading cryptocurrency exchanges, South Korea is ranked the 4th largest trader in Bitcoin. Even more, South Korea was initially ranked number 3, prior to the cryptocurrency price plunge of 2018 and the implementation of several internal regulatory restrictions by its government.

Crypto in South Korea

Up until 2019, the South Korean government has held a rather restrictive stance towards cryptocurrency and blockchain activities in the country. Notably, the government has recently become more supportive, as we can tell from new propositions and moves to optimize and integrate the blockchain industry and crypto market into the South Korean economy. 

In the midst of all these developments are numerous trading platforms and options to buy Bitcoin in South Korea. In this guide, however, we look at the methods that these platforms use rather than the platforms themselves and we will be shedding some light on what to look out for.

Buy Bitcoin with a credit card

A few centralized exchanges in South Korea offer users the opportunity to buy crypto with a credit card or via specialized ATM machines. These methods, however, come at a high cost – usually, they charge around 7%. 

Bitcoin Vouchers 

Some centralized exchanges in South Korea work with Bitcoin vouchers, sold by merchants across the country. This purchase is off-chain since the voucher code needs to be verified by the exchange before on-chain transfers are made to the buyer’s wallet.  

Peer-to-peer

Technically, peer-to-peer trades are completely decentralized with no one, except those directly involved, setting the price. If you have a friend that owns Bitcoin and he or she is willing to sell this to you at a fair price, this may be your best option. However, trading with strangers on a peer-to-peer basis, is not safe.

Over-the-counter (OTC) platforms

While there are several crypto exchanges in South Korea, only a handful offer OTC brokerage services for cryptocurrency. With OTC trades, market prices are defined off an exchange’s public order book. Trading parties set their own prices, which may be slightly more expensive than the global spot price, or cheaper if the seller is trading arbitrage. 

OTCs usually work with some type of escrow system, which is a method where the traded assets are locked up in an automated waiting-wallet, controlled at the exchange’s end which releases the funds only after the seller has confirmed receipt of the agreed payment. If a payment is made, and the seller does not confirm receipt of payment, the funds remain in the wallet and the buyer can lodge a complaint. Once the exchange confirms the payment has indeed been made, the crypto is released to the buyer.

Trading Bitcoin

Once you have your Bitcoin, you can either keep it in a wallet or actively trade it against other cryptocurrencies. At present, the best option for this is by trading on a centralized exchange.

When choosing an exchange to trade on, it is important to make sure it is a trusted exchange. Usually, a trusted exchange will require new users to verify their identity, to make sure market participants are not sanctioned, and to keep capital flows clean. Security is another important element. Lastly, performance is key to an efficient order book where traders can get the best prices.

AAX is the only cryptocurrency exchange that uses the same matching engine as the London Stock exchange, as well as other top-tier, high volume stock exchanges.

It’s also important to see how deep the order book is. If you’re trading small amounts, the order book does not need to be particularly deep, but if you intend to trade large volumes, sometimes you’re better off trading on an OTC platform. This gives you more control over the price.

As a seller on AAX’s OTC platform, you can also track the global spot price to make sure you can make your offer as competitive as possible. If the price falls below a certain point, you can set it up in such a way that your offer is taken down, only to resurface again once the price is favorable.

Want to learn more?

Stay up to date on the latest news, industry trends and developments.

Add comment

Your email address will not be published. Required fields are marked *

Choose a language