Mushrooming Proliferation... Failing 'Kimchi Coin'

Soaring Until March Then Plummeting... Issues with Low Listing Entry Standards
Unlike Bitcoin, Trading Mainly on Domestic Exchanges... Weak Supply-Demand Base

The price of 'Kimchi Coin,' issued by a domestic cryptocurrency company, has dropped by more than half compared to last month.

[Asia Economy Reporter Gong Byung-sun] On the 10th of last month, office worker Hwang Hyun-jung (29, pseudonym) invested 20 million KRW in the cryptocurrency ‘MediBloc’ issued by a domestic blockchain company. At that time, MediBloc was only 230 KRW, but since it surged to 398 KRW on the 2nd of last month, she judged that it could rise again. However, as of the 13th, MediBloc has fallen to 120 KRW. Hwang said, "The loss rate is close to 50%, so I can't even cut my losses," adding, "Other cryptocurrencies like Ethereum have risen significantly, which makes it even more painful."

The sluggishness of Kimchi coins, which have sprung up like mushrooms, continues. Market participants who started investing due to the sharp rise of Kimchi coins created by domestic cryptocurrency issuers are waiting for a rebound, but it seems unlikely.

According to the domestic cryptocurrency exchange Upbit as of 8:30 a.m. on the 13th, Kimchi coin MediBloc recorded 120 KRW, down 15.49% from the previous trading day. This is about a 69.8% drop from the all-time high of 398 KRW recorded on the 2nd of last month. Emble also recorded 23.9 KRW, down about 70% from its all-time high of 79.9 KRW.

Kimchi Coins Racing Until March

From the end of March until the beginning of last month, the rise of Kimchi coins was dazzling. MediBloc rose 115.38% on the 2nd of last month alone. Klaytn, issued by a Kakao subsidiary, also rose from 1,685 KRW on March 1st to 5,049 KRW on the 2nd of last month. Many investors began participating in the cryptocurrency market due to the rise of Kimchi coins. The number of subscribers to K Bank, which is partnered with Upbit, increased from 280,000 in January to 630,000 in February and 800,000 in March. NH Nonghyup Bank, which has a partnership with Bithumb, also saw the number of new deposit and withdrawal account subscribers increase from 139,859 in January to 185,950 in February and 248,602 in March.

However, unlike major cryptocurrencies such as Bitcoin and Ethereum, Kimchi coins are mainly traded on domestic exchanges, making their supply-demand base inherently weak. According to the cryptocurrency market data site CoinMarketCap, on that day, domestic exchanges accounted for a staggering 99.89% of the total trading volume of MediBloc. Another Kimchi coin, DicarGo, is also traded about 95.81% on domestic exchanges.

Mushrooming Listings... Production of Poor-Quality Coins

The problem is that it is too easy to list cryptocurrencies on domestic exchanges. Each exchange has different listing criteria, and it is easier to get listed compared to exchanges in other countries. Currently, there are a total of 178 cryptocurrencies listed on Upbit, while the largest Japanese exchange BitFlyer trades only 5 cryptocurrencies. Another domestic cryptocurrency exchange, Korbit, trades only 37 cryptocurrencies.

There are cases where listings occur without thorough verification. The cryptocurrency Arowana Token, which caused controversy by rising 100,000% in just 30 minutes on the 20th of last month, showed signs of trying to conceal key figures by replacing its whitepaper. The whitepaper deleted Park Jin-hong, CEO of X-Tock, who was listed as the developer just before listing. Blockchain company X-Tock issued cryptocurrency in 2018, aiming to offer over-the-counter stocks as security tokens, but failed to implement most plans and was eventually delisted from exchanges such as Coinbit. Investors expressed unease, but Arowana Token is still traded on Bithumb.

Given this situation, a rebound of Kimchi coins also seems difficult. Interest itself has declined. According to CoinMarketCap, the trading volume of MediBloc was 2 billion USD (about 2.2472 trillion KRW) on the 2nd of last month but dropped sharply to about 240,000 USD on the 12th. Klaytn’s trading volume also decreased from about 500 million USD to 87 million USD.

Professor Hong Ki-hoon of Hongik University’s Department of Business Administration said, "The market is increasingly disturbed, with new Jindo dog coins emerging recently," and emphasized, "Among Kimchi coins listed on domestic exchanges, many do not even carry out proper projects, so investors should be cautious."

This content was produced with the assistance of AI translation services.