Bybit's Shunyet Jan: Korea Slow to Embrace Spot Bitcoin ETFs, Undercutting Growth Potential

Korea's technological competitiveness in the increasingly globalized cryptocurrency market will stagnate, impeded by the financial regulator's concerns over crypto volatilities and ensuing risks to market stability

Shunset Jan, Head of Derivatives Business and Institutional Sales at Bybit, recently shared his insights on the Korean cryptocurrency market in an interview with The Korea Times. He highlighted the country's strengths, such as its technological leadership, high retail engagement, and institutional interest, which are driving growth in the crypto sector. However, he also pointed out challenges, including stringent regulations and a speculative market, which could be addressed to fully capitalize on the opportunities present.

According to Jan, South Korea boasts strengths in terms of its technological prowess, which are harnessed by both startups and established firms to drive innovation within the fintech space. This, coupled with the country's willingness to address regulatory exploits and high retail engagement, bodes well for the growth of the cryptocurrency market.

“With the Korean Won consistently ranking among the top currencies in global crypto trading, robust local demand is evident. Approximately 12 percent of Koreans, or around 6.45 million, actively trade cryptocurrencies, indicating a receptive retail market poised for further expansion.”

Highlighting the growing institutional interest, he pointed to the significant transactions and kimchi premium, which are indicative of the institutional participation in the Korean cryptocurrency market. This bodes well for the growth outlook and positions Korea as a key player in the global cryptocurrency ecosystem.

However, stringent regulations, such as restrictions on trading for non-nationals and a ban on initial coin offerings, aim to protect investors but may also stifle innovation and limit market accessibility, he noted. Further, the speculative nature of the market contributes to significant volatility, deterring cautious investors and leading to rapid price fluctuations.

“Although there are ongoing efforts to enhance investor protection, critics say that these measures often prioritize compliance over fostering innovation, leaving retail investors with insufficient safeguards.”

These regulatory constraints also limit arbitrage opportunities, exacerbating persistent price premiums and undermining overall market efficiency.

“We foresee a significant growth potential in the Korean crypto market, fueled by a risk-taking culture and technological adoption. Future success will depend on evolving regulatory frameworks that balance investor protection with innovation, ultimately stabilizing the market and enhancing its integrity as it navigates ongoing challenges."

Jan also shared his perspectives on Bybit's institutional offerings and the challenges in the Asia-Pacific region. He discussed the opportunities for advancing options trading in the region and the benefits it could bring.

According to Jan, he is looking to enhance Bybit's derivatives offerings, leveraging his experience in traditional finance and high-frequency trading to cater to the specific needs of institutional investors.

“We can craft solutions that cater specifically to the nuanced needs of institutional investors, bridging proven practices from traditional finance with the flexibility and speed of digital assets.”

Options trading in crypto is similar to traditional stock options trading, except that buying and selling options contracts are based on cryptocurrencies, such as Bitcoin, Ethereum, and other digital assets, as mediated by call options and put options. Crypto options trading leverages cryptocurrency price movements to hedge portfolios and profit from volatility. The highly complicated and complex nature of the trading requires deep market knowledge both in crypto and options scheme due to heavy risks.

Highlighting one significant hurdle, he pointed to the diverse regulatory landscape across the region, which can create uncertainty for institutional participants.

“Bybit is making continuous efforts to foster strong relationships with local regulatory bodies to ensure compliance while advocating for a supportive environment for crypto derivatives and ensuring the platform can navigate these regulations effectively.”

He added that the need for market education is growing, prompted by many institutional investors being unfamiliar with the dynamics of options trading in the crypto space.

“We will leverage different opportunities with our new and existing clients to demystify options trading and build confidence among potential participants," he said.

Despite the challenges, the benefits of advancing options trading in the Asia-Pacific region are substantial, in his view.

“Bybit can attract more institutional investors seeking regulated and sophisticated trading vehicles,” he said.

“This shift would not only increase market liquidity but also establish a more stable trading environment. Our commitment to refining custody solutions and enhancing liquidity across our platform will further solidify Bybit’s reputation as a trusted partner for institutional clients.”