Korean crypto stocks surge after U.S. approves bitcoin ETFs

The prices of cryptocurrencies are displayed on an electronic board at Bithumb office in southern Seoul on Thursday. [YONHAP]

Local crypto stocks rallied Thursday after the U.S. Securities and Exchange Commission (SEC) approved exchange-traded funds (ETFs) that track the price of bitcoin.

Woori Technology Investment, a venture capital firm that owns 7.22 percent of Dunamu — the operator of Korea’s largest crypto exchange Upbit — reached the maximum daily trading limit to close at 8,020 won ($6.1), up more than 160 percent from the recent low in October last year.

The share price of Hanwha Investment & Securities, which owns 5.95 percent in Dunamu, also reached the maximum daily trading limit to close at 4,400 won, up more than 100 percent from a recent low last January.

Shareholders of Bithumb Korea, the country’s second-largest crypto exchange, also surged.

Tscientific, an IT firm that holds 7.17 percent in Bithumb Korea, jumped 20.35 percent on the same day, while shares in Wizit, which owns 23.25 percent of Tscientific, also soared to hit the maximum trading limit.

The stock rally followed the SEC authorizing rule changes on Wednesday to allow the creation of bitcoin ETFs in the United States after years of opposition. The products, which track a bitcoin benchmark, are expected to have a positive effect on the price of bitcoin and accelerate the adoption of the technology.

Asset managers have applied for bitcoin ETFs since the early 2010s, but the SEC rejected them on the grounds they would be vulnerable to market manipulation.The SEC approved 11 bitcoin ETF applications.

Bitcoin has “settled as a type of an investment asset following the [SEC’s] approval,” said Bank of Korea Gov. Rhee Chang-yong on Thursday. “We have reached a time to test the value and stability of bitcoin ETFs as a form of an investment asset.”

Bitcoin’s price broke $47,000 this week for the first time since April 2022 as optimism around approvals emerged.

BY JIN MIN-JI [jin.minji@joongang.co.kr]