South Korean Election Puts Bitcoin ETFs in the Spotlight

Democratic Party leader Lee Jae-myung pledged to reduce trading fees and create a safer investment climate to support the younger generation’s wealth accumulation. However, experts like Anndy Lian warned that past political promises have fallen short, and actual implementation will depend on various factors including market conditions and investor sentiment. 

Meanwhile, corporate interest in Bitcoin is rising globally, with Michael Saylor’s Strategy continuing to aggressively acquire BTC. While Bitcoin’s correlation with traditional equities remains inconsistent, its record-low volatility and increased institutional adoption suggest it is maturing into a more stable and globally recognized financial asset that is increasingly seen as a valuable portfolio diversifier.

South Korea May Join Global Bitcoin ETF Wave

South Korea may be on the brink of a major shift in its approach to digital assets, especially with leading presidential candidates expressing strong support for legalizing spot Bitcoin exchange-traded funds (ETFs). This potential policy change could align South Korea more closely with global trends and be a huge turning point for its crypto regulatory landscape. 

Currently, institutional investment in cryptocurrencies is still banned in the country, with 100% of trading volume coming from retail participants. This is according to Ki Young Ju, the CEO of CryptoQuant.

In a May 6 statement reported by The Korean Economic Daily, Democratic Party leader Lee Jae-myung pledged to not only legalize spot crypto ETFs but also reduce transaction fees and create a safer investment environment. The goal, he said, is to help the younger generation accumulate assets and plan for the future. The Democratic Party made similar commitments during its 2024 campaign, but those promises have yet to materialize into tangible policy.

Despite the enthusiasm from political leaders, regulatory experts advise caution. Anndy Lian, a blockchain adviser, explained that while the candidates’ pro-crypto rhetoric is encouraging, historical precedent makes it difficult to predict actual progress. Lian pointed to past promises made by the People Power Party, which won the 2022 election on a similarly crypto-friendly platform but failed to implement any major reforms before the impeachment of President Yoon.

Lian also pointed out that even if policy changes do actually occur, the success of any future Bitcoin ETFs will depend on a variety of factors, including market conditions and investor sentiment. He believes that a pro-crypto president could help drive reform and potentially bring South Korea in line with jurisdictions like the US, where Bitcoin ETFs have attracted billions in net inflows. 

The Financial Services Commission’s recent tone also hinted at a more open stance toward crypto regulation, which could help support this shift. Still, the experience of Hong Kong, which launched its own batch of Bitcoin and Ethereum-based ETFs in April 2024 to lukewarm market reception, serves as a reminder that regulatory approval does not necessarily guarantee investor enthusiasm or success.

Strategy Eyes Top Spot with Bitcoin Power

Bitcoin is also the top priority in other countries. Michael Saylor’s Strategy, the world’s largest corporate holder of Bitcoin, could become the leading publicly traded company in the future, according to Strategy analyst Jeff Walton. 

Featured in the Financial Times documentary Michael Saylor’s $40 Billion Bitcoin Bet, Walton made the bold claim that Strategy will be “the number one publicly traded equity in the entire market,” largely due to its unmatched Bitcoin holdings and aggressive accumulation strategy.

The company currently holds around 568,840 Bitcoin, with a value of approximately $59 billion. According to Walton, no other company holds as much “pristine collateral” as Strategy, and its Bitcoin position puts it in a league of its own. He also talked about the firm’s remarkable fundraising capacity, and specifically referred to a $12 billion raise over just 50 days in late 2024. “It’s incredibly hard to raise $100 million of capital, and they just did that 120 times in 50 days,” he said.

Strategy Bitcoin purchases (Source: SaylorTracker)

Saylor, the company’s co-founder and Executive Chairman, doubled down on his bullish vision for both Bitcoin and Strategy. In the documentary, he predicted that Strategy could evolve from a $100 billion enterprise into a $10 trillion one. He also forecasted that Bitcoin could hit $1 million per coin in the next decade, and as much as $13 million by 2045.

Strategy is currently ranked as the 151st largest company in the world with a $117 billion market cap, and will need to surpass Microsoft, which has a market cap of over $3.3 trillion, to achieve the top spot. While extremely bullish, Saylor acknowledged the risks and reiterated that Strategy’s capital structure is designed to withstand severe Bitcoin drawdowns, even scenarios where BTC drops 90% and remains depressed for several years.

Although such an outcome would be very painful for equity holders, Saylor said the company’s structure ensures other stakeholders will still be protected.

Bitcoin Not Yet a True Market Hedge?

Meanwhile, Bitcoin’s changing relationship with US equities is fueling debate about its potential as a global safe-haven asset. According to new research from blockchain data firm RedStone Oracles, Bitcoin recently showed a strong negative correlation with the US stock market when looking at short-term trends, particularly the seven-day trailing correlation. 

However, this relationship weakens over longer periods. RedStone’s analysis of the 30-day correlation between Bitcoin and the S&P 500 index revealed a fluctuating correlation coefficient ranging from -0.2 to 0.4, which means that Bitcoin does not consistently behave as a hedge against equities.

The study suggests that to qualify as a reliable safe-haven asset, an asset must show a sustained negative correlation with equities below -0.3. Bitcoin’s failure to meet this threshold implies that it cannot yet serve as a dependable counterbalance during periods of financial stress. Despite this, the researchers still argue that Bitcoin holds value as a portfolio diversifier. Its tendency to move independently from traditional assets can help investors achieve better risk-adjusted returns, particularly when stocks are underperforming.

RedStone’s co-founder and COO, Marcin Kazmierczak, said that while Bitcoin may not yet have the stability or behavior of traditional safe-haven assets like gold or government bonds, it is gradually maturing into a more globally recognized financial instrument. He pointed to the growing involvement of institutional investors and corporate treasuries, like BlackRock’s support and strategic Bitcoin allocations, as signs of increasing market legitimacy and reduced volatility. Kazmierczak believes that these factors are helping Bitcoin inch closer to behaving like a long-term investment asset.

Bitcoin’s weekly volatility reached a 563-day low on April 30, and fell below the realized volatility of both the S&P 500 and Nasdaq 100. This reinforces the view that Bitcoin is beginning to resemble a more stable and serious financial asset.