Rule №1 of being a ninja? Always remember to wear your mask.
If you met Han Kee Kim or “Han” as he prefers to be called, on the streets in downtown Seoul, South Korea, you would think that he resembles any of the millions of other South Korean Millenials.
With perfectly coiffed hair, androgynous features and skin like alabaster, Han, 27, looks like a BTS (the hit K-pop boyband) clone, one of many in Seoul’s hip Gangnam district (made famous by the K-pop singer Psy).
But while Han may look the part of a K-pop star, his outward appearance is subterfuge for a darker secret that he carries with him. Han, like thousands of other young South Korean men during the height of the cryptocurrency craze, made (and lost) thousands of dollars during the cryptocurrency bubble fueled by rampant speculation in the digital assets.
Today, Han lives with his parents, but once made so much money trading in cryptocurrencies that he was splashing out as much as US$1,000 a month at high-end nightclubs and thousands more on designer shoes, bags and clothing.
During those heady days when Bitcoin soared towards US$20,000 and the Cristal kept flowing, Han quite his job, borrowed money to buy more cryptocurrency and invested in the latest initial coin offerings (ICOs). He even planned to buy an apartment (a big deal in Seoul, where property is out of reach of most average wage earners) in the hip Apgujeong area.
But as the prices of cryptocurrencies crashed, Han’s fortunes came crashing with them.
One-Way Bets Tend to be a Gamble
Today, he cuts a lean figure, gaunt, with a little eye make-up to cover his lack of sleep.
“I don’t think it’s fair that people call it (cryptocurrency trading) gambling. But there are elements of truth here and there.”
But Han is not alone in his hopes that cryptocurrencies would have afforded him a better life.
Mr. Bernstein was showing off his rare coin collection to his wife.
In a country where entry into a prestigious university is one of the only ways to improve one’s station, Han, like hundreds of thousands of others young people in his generation, helped fuel the world of cryptocurrencies, by leveraging its potential as a way out of their otherwise dead-end prospects.
And although many young people are still scarred and saddled with debt from the aftermath of the cryptocurrency crash, hope still lingers that digital money may be a way to break out of the low-income cycle.
According to Kim Han Ri, a 23-year-old part-time software developer who graduated from a vocational training school,
“There is no true opportunity in South Korea for the average young person.”
The Millennial works part time at a Krispy Kreme and lives with her parents, while learning English online at night.
Streets of Seoul are paved with souls.
Initially, Kim had made a lot of money during the early days of the cryptocurrency boom. She spent tens of thousands of dollars on designer wear and spa treatments, lavishing expensive gifts on her parents and treating them to expensive hot pot meals. She dreamed of opening her own fashion business one day when the cryptocurrency crash caused her to lose almost her entire savings.
“I felt a sense of shame when I lost money on my Bitcoin investments not once, but twice because I wanted to make the money all at once.”
But if you would have thought that the experience would have left Kim disillusioned about cryptocurrencies you would be wrong.
Kim is defiant, continuing to believe in cryptocurrencies as the future and the key to social mobility in a country where if one does not make it to a top university, the odds are slim to none.
And Kim’s experience is not unique.
The Decentralized World’s Disaffected Youth
Across the globe, millions (if not billions) of young people are growing increasingly disillusioned and disaffected with the current economic structures that continue to prevent them from reaching their highest aspirations.
Whether it’s student loan debt or the high price of housing, young people from Seoul to Seattle, Singapore to Santiago are increasingly despondent about their opportunity to lead lives better than their parents’.
Young zombies looked surprisingly harmless and with no particular desire to eat brains.
Pensions are being eroded, lifelong employment is a pipe dream and home ownership is a fantasy.
Against this backdrop, is it any wonder that Millennials (especially young single men) have been drawn to the prospect of cryptocurrencies to lift them from their quagmire.
Being young in South Korea can be a defeating and stifling prospect. To succeed is to either get a government position or a job at one of a small but extraordinarily powerful group of chaebols (large family-owned conglomerates) that control almost 90% of all the products that South Koreans use.
Income inequality in South Korea is among the worst in Asia and youth unemployment is 10.5% despite overall unemployment only being 3.4%.
Young South Koreans are referred to as the “sampo generation” which refers to the three things they have given up on, romance, marriage and starting a family.
So when cryptocurrency came along, it was as if a spark had fallen upon a room full of dry powder.
From often impassioned discussions in chat rooms to weekly meetups and even intellectual salons created just for digital coins — there was a sense of hope that perhaps cryptocurrencies could be a way to reset the South Korean social order.
Cryptocurrency As An Investment Gateway Drug
Unlike stocks, buying cryptocurrencies was a lot easier and even first-time investors like Han needed to only invest a small amount in the early days.
“It was an opportunity to make big money.”
Even today, his eyes are wide in excitement, recalling the prospect.
South Korean cryptocurrency celebrity Remy Kim who goes by the nom de guerre “Les Mis” adds,
“Crypto(currency) played a role in shifting wealth from one group in society to another. It has affected (South) Korean society tremendously.”
Remy’s first encounter with cryptocurrencies was after his computer was hacked by a person who demanded 1.2 Bitcoin in ransom — worth about US$800 at a time.
First hit’s always free — it’s called an Airdrop.
But that ransom turned out to be a blessing in disguise as he grew to understand the burgeoning value of Bitcoin and rode the wave all the way up to US$20,000 peak Bitcoin.
And Remy soon enjoyed the trappings of Bitcoin wealth as well,
“I’m the youngest person in (South) Korea with a Rolls Royce.”
As cryptocurrency markets started to buckle, South Korea’s government mulled shutting down cryptocurrency exchanges last year, arguing that it was beginning to look a lot like gambling.
But news of the possible government restrictions caused a massive backlash, forcing Seoul to backpedal and instead simply bar new cryptocurrency investors from opening new anonymous accounts linked to banks, presumably to limit the potential for cryptocurrency to be used for money laundering.
In All The Right Places
And while the South Korean cryptocurrency bubble may have subsided somewhat, there are still opportunities, except that they are not as plentiful as before.
Ki Young Jung, a local cryptocurrency celebrity who goes by the nickname “Kimchi Powered” still invests in cryptocurrencies but warns others that there aren’t as many money-making opportunities as before.
“Many people are very depressed these days because the price of Bitcoin has dropped.”
And the falling prices of bellwether cryptocurrencies such as Bitcoin and Ethereum are not the only reason that investing in cryptocurrency is no longer a sure bet.
Big companies in South Korea are increasingly entering the cryptocurrency space and muscling out retail investors.
Hyundai, a massive South Korean conglomerate that manufactures everything from vehicles to skincare products, created a blockchain platform called HDAC and advertised the technology at the World Cup.
Lotte, another South Korean chaebol has worked with blockchain startups for the last three years, some of which are active cryptocurrency trading outfits.
Where before, simply buying and holding onto cryptocurrency was a sure-win strategy, these days, far more sophisticated techniques of trading are required to ensure profits in the cryptocurrency market.
According to Remy,
“(South) Koreans lack knowledge about finance. They are stingy at the store but then they poured everything into cryptocurrencies.”
But if nothing else, the “all-in” attitude towards cryptocurrencies by South Koreans is indicative of just how much the digital assets have come to represent the opportunity for social and economic betterment and a beacon of hope in a country where social mobility is limited.
Kim continues to hold out hope that the cryptocurrency bull market will return,
“I have nothing to lose. I always wanted to be rich.”
But perhaps getting rich off cryptocurrencies will require more effort than South Korea’s Millennials had earlier anticipated.
Read more at: https://www.bbntimes.com/en/technology/the-secret-key-of-cryptocurrencies-is-hope
