Stable coin prices despite war... Korean investors also snap up crypto-related stocks

[The Financial News] As the virtual asset market remains relatively stable even amid the war between the United States of America (US) and the Islamic Republic of Iran, Korean retail investors in overseas stocks are once again buying crypto-related shares.
According to Korea Securities Depository (KSD) on the 9th, domestic investors who trade in overseas stock markets made net settlement purchases of 51.14 million dollars (76.2 billion won) in shares of Circle Internet Group over the past week (March 2–6). This was the third-largest net purchase amount over that period. Circle is the issuer of the stablecoin USD Coin (USDC). The company’s share price climbed 22.13%, from 83.44 dollars on February 27, before the war, to 101.91 dollars this month. On the 5th, it briefly rose into the 105-dollar range. Circle’s stock had been on a strong uptrend even before the US–Iran war broke out. After an increase in USDC circulation was confirmed, the share price jumped 35.47% on February 25 from the previous day. The stock has continued to show strength even after the conflict began.
Circle is not the only name drawing attention from these investors. Over the past week, they also bought 18.45 million dollars (27.4 billion won) worth of shares in Coinbase, a leading US virtual asset exchange, making it the 13th-largest net purchase. Bitmine Immersion Technologies, the world’s largest corporate holder of Ethereum, ranked 14th with 13.84 million dollars, while the 2x Bitcoin ETF followed with 13.82 million dollars at 15th. MicroStrategy, known as the world’s largest corporate holder of Bitcoin, ranked 20th with 10.5 million dollars in net purchases. These stocks have generally been on an upward trend before and after the outbreak of war. Coinbase rose 12.15%, from 175.85 dollars on February 27, just before the conflict, to 197.22 dollars on March 6, while MicroStrategy gained 3.1% over the same period, from 129.50 dollars to 133.53 dollars.
In the US stock market, the USCF Oil Plus Bitcoin Strategy ETF, traded under the name “USCF Oil Plus Bitcoin Strategy ETF (WTIB),” has shown the most vigorous gains among exchange-traded funds that track both crude oil and Bitcoin prices. After the war broke out, the price of the USCF Oil Plus Bitcoin Strategy Fund (ticker: WTIB) surged 36.34%, from 16.04 dollars to 21.87 dollars. ETFs linked to Circle, such as YieldMax CRCL Option Income Strategy ETF (ticker: CRCO) and Leverage Shares 2x Long CRCL Daily ETF (ticker: CRCG), as well as Coinbase-related products like YieldMax COIN Option Income Strategy ETF (ticker: CONY) and GraniteShares 2x Long COIN Daily ETF (ticker: CONL), are also on the rise.
The strength in crypto-related stocks is widely seen as a reflection of the rally in the virtual asset market since the war began. According to global virtual asset data platform CoinMarketCap, Bitcoin was trading at 101.44 million won as of 3 p.m. that day, up 1.62% from the previous day. Bitcoin, which had fallen into the 90 million won range late last month, climbed into the 107 million won range after the outbreak of the conflict.
However, experts are divided on whether the rally in crypto-related stocks can be sustained, pointing to the inherent structural weaknesses of the virtual asset market. In fact, many of these stocks, including Coinbase, Bitmine Immersion Technologies and MicroStrategy, fell for two consecutive days on the 5th and 6th, giving back a significant portion of their earlier gains.
Kim Ji-won, a researcher at KB Securities, said, "This shows that in times of heightened geopolitical risk, capital can move into digital assets such as Bitcoin," but added, "The possibility of a blockade of the Strait of Hormuz and the prospect of prolonged tensions in the Middle East remain major sources of uncertainty for the market."
Global virtual asset trading firm Wintermute noted in a recent report, "Despite the relief rally, the market remains unstable and volatility is expanding again," and went on, "Bitcoin has not yet fully proven its role as digital gold, but if the conflict drags on and too much capital crowds into traditional safe-haven assets, some funds may start looking for alternatives."
fair@fnnews.com Han Young-joon Reporter