The Financial Services Commission of South Korea has unveiled a comprehensive survey report conducted by the Korea Financial Intelligence Unit, shedding light on the dynamic landscape of the country's virtual asset market. The survey, encompassing the latter half of 2023 from July 1 to December 31, 2023, focused on 29 virtual asset business operators, including 22 exchanges and 7 wallet/custodian services.

Remarkably, the survey unveils a significant surge in crypto trading activity, with approximately 12% of South Korea's population, totaling 6.45 million individuals, actively participating in the market. However, the report reveals that despite the substantial participation, small investors held only $734 worth of cryptocurrencies on average.

Key findings from the survey underscore the robust growth in various metrics within the virtual asset market. The daily average transaction size for virtual asset traders soared by 24%, reaching 3.6 trillion won, compared to 2.9 trillion won in the preceding period. Concurrently, the total market capitalization of virtual assets witnessed an impressive 53% surge, climbing from 28.4 trillion won to 43.6 trillion won by the end of December 2023.

Additionally, virtual asset businesses experienced an 18% increase in total operating profit, rising from 228 billion won to 269.3 billion won. Deposits in won held by these businesses surged by 21%, from 4.0 trillion won to 4.9 trillion won, indicating heightened investment sentiment and market activity in the latter part of the year.

The survey also delves into demographic trends, revealing that the most active age group engaged in crypto trading comprises individuals in their 30s. Moreover, it highlights that approximately 4.55 million users are classified as small investors, holding less than 1 million won (approximately $734) in cryptocurrencies.

Despite the overall growth, the survey notes a slight decrease of 3.5% in the number of virtual asset items traded, attributed to factors such as new listings and trading suspensions. Furthermore, market consolidation is evident, with the number of independently listed virtual assets managed by a single domestic business operator declining by 9.3%.

However, amidst the market's expansion, the survey also signals ongoing risks and challenges. Virtual asset prices remain highly volatile, with volatility levels reaching 61.5%. Additionally, the survey highlights a concerning trend of virtual asset businesses shutting down, with four operators closing their doors by the end of December 2023, underscoring the importance of caution and due diligence when engaging in virtual asset trading and storage.