Cryptocurrency Information Bureau News: South Korea to approve spot Bitcoin ETF! Investor expectations rise with latest roadmap. #Korean cryptocurrency #Bitcoin ETF #Cryptocurrency news
Video explanation
Will Bitcoin become more accessible in Korea? What is a "Bitcoin ETF"? A thorough explanation for beginners!
Hello, I'm John, your local blockchain guide!
Today, we received some very exciting news from our neighboring country, South Korea. "South Korea has begun to move in earnest toward approving a Bitcoin ETF!" This news may actually have something to do with the future of our money. However, many people may be scratching their heads, thinking, "I've heard of Bitcoin, but what is an ETF...?" or "It seems difficult..."
Don't worry! In this article, we will explain everything from the basic meaning of words like Bitcoin and ETF to what South Korea's recent actions mean for us, in a fun and easy-to-understand way that will make you feel like you're being taught by a grown-up.
First of all, what is "Bitcoin"? ~ A new form of money in the Internet era ~
First, let’s briefly review the basics of Bitcoin.
Bitcoin in a nutshell"A cross-border digital currency that can be used online"It's like that. The currency we use every day, such as yen and dollars, is issued and managed by countries such as the Bank of Japan and the US central bank (FRB: Federal Reserve Board, the central bank of the United States), right? This is called "legal tender." However, Bitcoin is not managed by a specific country or bank. This is its major feature.
So who manages it? Well, it is managed and operated by a worldwide network using a groundbreaking technology called "blockchain" (a very secure digital ledger system in which many computers all hold the same transaction records and monitor each other, making it extremely difficult to tamper with data). This has the advantage that money can be sent directly between individuals at a relatively low fee, without going through a bank.
It is also often compared to "digital gold." Just like real gold, the total amount issued is fixed (about 2100 million!), and because of its scarcity, it is expected to be a means of preserving value, and its price fluctuates according to market supply and demand.
So, what is the main topic of this article, "ETF"? ~A handy toolbox for investing~
Next, let's look at the keyword in this news story, "ETF." If you understand this, the news will be much more interesting!
ETF is an acronym for "Exchange Traded Fund," and in Japanese it is called "Exchange-listed investment trust." ...Hmm, when you see all those kanji, it can be a bit intimidating!
To put it more simply:"We offer bento packs and assorted sets of various stocks and bonds (like IOUs issued when a country or company borrows money) that have been carefully selected by experts and packaged together in a well-balanced way."It's like that. The big feature of this "Bento Pack" is that it can be bought and sold easily at any time during trading hours on the stock exchange (a market where stocks are bought and sold), just like regular company stocks (such as Toyota or Sony stocks).
For example, there are many types of ETFs, such as "an ETF that brings together stocks of 200 well-known Japanese companies," "an ETF that brings together stocks from countries around the world that are expected to grow," and "ETFs that track the prices of commodities such as gold and oil." ETFs are a convenient tool that allows investors to easily diversify their investments (a method of reducing risk by investing in various things) according to their own ideas.
So, what is a "Bitcoin ETF"?
If you've gotten this far, some of you may already have an idea!
As the name suggests, a Bitcoin ETF is"An ETF designed to track the price of Bitcoin"In other words, even if you don't buy Bitcoin directly from a virtual currency exchange (a place that specializes in buying and selling Bitcoin), by buying this ETF through a securities company, you can expect the same effect as indirectly investing in Bitcoin.
It may be easier to understand if you imagine this as being similar to buying stocks, allowing you to purchase products that aim to generate returns in line with Bitcoin's price movements from your regular securities account.
This has some benefits that beginners may find especially appealing:
- Ease and simplicity: If you are someone who regularly trades stocks, you may be able to start investing in a familiar environment, without having to go through the trouble of opening a new account at a cryptocurrency exchange or learning in-depth specialized knowledge such as how to manage private keys (which are like complex passwords used to protect Bitcoin).
- Regulation and peace of mind: Since ETFs are listed on stock exchanges, they are subject to the supervision of the country's financial authorities (government agencies that monitor the rules of money, similar to the Financial Services Agency in Japan) and must pass strict screening standards. Therefore, there is a sense of security that trading is not in a lawless zone, but within a framework that is somewhat protected.
- Diversify your investments from small amounts: Depending on the type of ETF, they can be purchased with relatively small amounts of money and can easily be combined with other assets to form a portfolio (a combination of investments), which is also an attractive feature.
A little more detail on South Korea's actions! What is a roadmap?
Now, let's get back to the main topic of this news. The Korean financial regulator (Kinyuuki Seitokyoku: an important government agency that makes rules about money and guides financial institutions in the right direction. It is similar to the Financial Services Agency in Japan) has submitted a specific "roadmap" for enabling ETFs of Bitcoin and other crypto assets (A general term for special coins and digital tokens that can be used on the Internet, of which there are many types other than Bitcoin) to be handled domestically.
This "roadmap" is, so to speak, "We will take these steps, make these preparations, and aim to reach this state by this date."A map or timeline showing how to achieve your goalsIt's like this. In other words, it doesn't mean that permission has been given yet, saying "Yes, you can sell Bitcoin ETFs from tomorrow!", but it can be seen as a strong indication of intent that "we will start preparing properly as a country to give permission!"
If this comes to fruition, it will pave the way for ordinary Korean investors to be able to buy Bitcoin ETFs through securities companies, which would be a huge step forward for the world of cryptocurrencies.
Why is this happening in Korea now? What is the global trend?
You may be wondering, "Why is this topic becoming so popular in Korea right now?"
In fact, at the beginning of this year (2024), the economic superpower, the United States, finally approved several "physical Bitcoin ETFs" (ETFs that actually hold and manage Bitcoin) and began trading, which was a huge catalyst. This caused a lot of money to flow into the Bitcoin market and also affected the price.
This success story in the United States had a huge impact on financial authorities and investors around the world. The idea that "Bitcoin can no longer be ignored" and "As a new investment target, proper rules should be established and it should be incorporated into the market" is spreading.
In particular, the trend of professional investors known as "institutional investors," such as pension funds, insurance companies, and major asset management companies, beginning to seriously consider investing in Bitcoin (this is called the "entry of institutional investors") is accelerating worldwide. South Korea may also be beginning to take a positive stance, aware of this international trend and its status as a financial hub in Asia.
The world of finance is also living in an era of constant change, with new technologies and asset classes (types of investment targets) constantly emerging, and countries racking their brains to figure out how to incorporate them into social structures.