As cryptocurrency trading in South Korea reaches insane levels, internet giant Cocoa may be ready for a rise in stock prices.
Referring to comments from analysts at Mirae Asset Daewoo, a South Korean brokerage firm, the Korea Herald says the chat app operator will benefit from continued enthusiasm in the Bitcoin (BTC) market. According to Mirae Asset Daewoo analyst Kim Jang Kwon:
“Cocoa directly or indirectly owns approximately 23 percent of Upbit’s operator Dunamu. Since Upbit has already surpassed the traffic and volume record set in the 4th quarter of 2017, we expect cocoa to be useful. ”
Upbit is one of the “big four” cryptocurrency exchanges in South Korea along with Bithumb, Coinone and Korbit.
In addition to its stake in Dunamu, Kakao, like other major South Korean conglomerates, also maintains a significant presence in the cryptocurrency and blockchain industries. The chat app operator has its own cryptocurrency, KLAY, as well as the Klaytn blockchain platform developed by the subsidiary Ground X.
According to Bloomberg, at the time of writing, the share price of cocoa 485,000 was won ($ 429.77). Mirae Asset Daewoo has raised its Cocoa price target to $ 522.81.
In fact, the internet giant earned over $ 25 million in the 4th quarter of 2017 from the investment in Dunamo. At that time, BTC and the cryptocurrency market experienced a fierce bull market where Bitcoin almost crossed the $ 20,000 mark in mid-December 2017.
According to Chang-Kwon, if the forecast for 2021 is one year for the bitcoin bull market, Cocoa’s investment surplus is likely to reach $ 90 million. The market analyst also pointed out that listing Coinbase on Nasdaq will result in a revaluation of Cocoa’s capital.
As Cointelegraph previously reported, trading is booming in South Korea. Earlier in March, the volume of large platforms temporarily exceeded market activity in the domestic stock market.
Upbit has been the main recipient of cryptocurrency trading, and the top banker, K bank, is reportedly targeting a first IPO in 2022. This is the extent of the current cryptocurrency trading fever as K Bank has accelerated its profitability chart despite major disruptions in 2019. This resulted in a loss this year of $ 89 million.
Meanwhile, the country’s regulators are stepping up efforts to monitor the cryptocurrency market in the midst of the current trade boom. Oslo Børs and other service providers are required to report all transactions or the risk of five years’ imprisonment to their main managers.
The cryptocurrency reporting policy is expected to take effect at the end of March. The country’s cryptocurrency companies have six months to comply with the new regulatory model.
South Korea’s tax authorities are also looking at the growing cryptocurrency market in an attempt to identify individuals who hide their assets in virtual currencies in order to evade taxes.