Korean investors obsessed with low-priced coins… What is the truth behind that psychology?

Low-priced coins refer to cryptocurrencies priced below 1,000 won each. This includes coins like Tezos and Cardano, which are in the hundreds of won, as well as fractional coins like BitTorrent and Pepe.

An interesting point is that even as Bitcoin surpasses 100 million won and popular altcoins like Solana reach tens of thousands of won, low-priced coins still record remarkably high trading volumes on Upbit. Why are low-priced coins, which have low market caps and limited intrinsic value, so loved?

The Psychological Magic of Low-Priced Coins

First, several cognitive biases influence investors’ choices to buy low-priced coins.

The illusion of numbers - Unit bias

Suppose you invest 1 million won. You can buy about 5 Solana coins, but you could buy thousands of low-priced coins.

Why does the feeling differ despite the same amount? It’s due to the unit bias. Owning 0.01 Bitcoin (a fractional unit) feels less substantial than holding 450 Ripple coins in your pocket. The psychological satisfaction from the face value itself overrides rational investment judgment.

The recent trend - Recency bias

Low-priced coins are highly volatile and often surge dramatically within 2-3 days. When investors see this short-term upward trend, they tend to ignore past patterns like sharp rises followed by sharp drops( and fall into the illusion of “this time will be different.” This creates a distorted expectation that recent trends will determine the future.

) The trap of reference points - Anchoring effect

After seeing Bitcoin’s price in the hundreds of millions of won, a 500-won low-priced coin feels incredibly cheap. But this is an illusion.

The anchoring effect appears in two forms: first, comparison with other coins### external anchoring(. The low-priced coin appears “relatively” cheaper compared to Bitcoin. Second, judging the current price based on the coin’s past peak) internal anchoring(. Thinking “this coin was 500 won before, so 100 won now is a bargain” is a mistaken perception.

) The temptation of quick riches

Low-priced coins experience dramatic price movements even with small changes. A rise from 500 to 600 won is a 20% profit, but a 1% move in Bitcoin’s 10 million won range feels less significant.

As stories of thousands of times returns with coins like Dogecoin spread, investors internalize the formula “low-priced coin = high profit opportunity.” The desire for quick gains dominates.

Fear of missing out (FOMO) and crowd psychology

The anxiety that you’ll regret not buying newly listed low-priced coins later. The fear of being left out while others buy. This is FOMO###Fear Of Missing Out(.

Without rational judgment, investment decisions are made solely based on “low price + new coin.”

The Unique Problem of the Korean Market - The Influence of the Kimchi Premium

It’s not just psychological factors. The structure of the Korean cryptocurrency market itself fuels the popularity of low-priced coins.

) Upbit’s monopoly and capital isolation

Upbit still holds over 60% market share. What happens when one exchange dominates over half the market? Capital cannot flow freely.

This leads to the Kimchi Premium - the phenomenon where prices on Korean exchanges are higher than overseas. This is especially pronounced in low-priced coins with low liquidity, as supply and demand are confined domestically.

The emergence of Kimchi coins

Many coins listed on Upbit generate most of their trading volume domestically. These “Kimchi coins” are highly sensitive to local investor sentiment and issues. Low-priced coins are particularly affected.

Combined with the psychological factors above, this creates trading volumes that are difficult to explain rationally.

Real-world Examples Revealing the Reality of Low-Priced Coins

Let’s compare Solana###SOL( and TomoFinance data.

With 1 million won, you could buy about 70,000 dollars worth of Solana (~5 coins), but about 1,300 TomoFinance coins.

This is a unit bias in action. The larger number of TomoFinance coins feels more psychologically attractive.

) The paradox of trading activity

Solana’s 24-hour turnover rate is about 0.11%. TomoFinance’s turnover rate is about 0.43%.

TomoFinance’s turnover is roughly 4 times higher.

A much higher trading volume relative to market cap indicates higher volatility and short-term trading dominance. This suggests a market driven more by psychology and short-term profit chasing than by intrinsic value.

Important Points Investors Often Miss

While high returns are possible with low-priced coins, choosing them solely because they are “low-priced” often leads to long-term losses.

( Breaking free from face value illusions

Just as a low stock price doesn’t mean undervaluation, a low coin price doesn’t guarantee intrinsic value.

Cryptocurrencies ignore issuance volume, market cap, and fundamentals; comparing only face value can lead to big mistakes. Even if the current price is low, if there’s no intrinsic value, it’s not cheap. Conversely, a high price can be cheap if growth potential exists.

) Checklist for Wise Investing

1. Focus on technical and fundamental analysis

• Understand what problem the coin aims to solve, not just the price
• Review the development team’s capabilities, partnerships, and roadmap
• Check the health and sincerity of the community

2. Follow risk management rules

• Use high volatility to your advantage, but always set stop-loss and take-profit orders
• Maximize profits with trailing stops, minimize risks
• Keep position sizes small

3. Diversify your portfolio

• Don’t allocate all funds solely to cryptocurrencies
• Avoid over-concentration in Bitcoin or low-priced coins
• Mix assets with low correlation### dollar, gold, bonds###

4. Continuously monitor market news

• Cryptocurrencies are sensitive to external events due to low intrinsic value
• Bitcoin movements influence the entire market
• Track regulations, hacks, statements from key figures

Conclusion: What Do True Investors Look For?

The popularity of low-priced coins in Korea is more a product of psychology and market structure than rationality.

Unit bias, recency bias, anchoring, FOMO, crowd psychology… all these factors combine to inflate low-priced coins. Add the Kimchi Premium and low liquidity, and you get a surge in trading volume that’s hard to explain rationally.

Of course, some people have made big profits from low-priced coins. But that’s likely due to luck.

The consistent advice from investment experts is: Buy good companies###coins( at fair prices. Evaluate intrinsic value, consider long-term prospects, and only invest when you can control risks.

This is the most important principle that’s easy to forget amid the low-priced coin frenzy.

) Frequently Asked Questions

Q. Should I avoid low-priced coins altogether?
A. Not necessarily. Beginners should prefer major coins like Bitcoin and Ethereum, but experienced traders confident in short-term trading using volatility can see low-priced coins as opportunities. The key is to base decisions on “intrinsic value,” not just “face value.”

Q. Is the Kimchi Premium beneficial or harmful to investors?
A. It’s a double-edged sword. Selling at higher domestic prices can realize gains, but buying at high prices and facing losses later is risky. Timing entry and exit points is crucial.

Q. Is high trading volume in low-priced coins a good sign?
A. Not necessarily. High volume can indicate high volatility and speculation. To assess market health, look at the volume-to-market cap ratio( turnover rate).

Q. Should cryptocurrency beginners avoid low-priced coins?
A. Beginners should start with less volatile, well-established coins like Bitcoin and Ethereum. Understanding market mechanics and developing psychological discipline are prerequisites before approaching high-risk assets like low-priced coins.