By Shelly Melancon (Switzerland)
Kakao’s share price might be on the rise (like bitcoin price) after crypto trading in South Korea reached epic proportions in recent weeks.
Mirae Asset Daewoo’s Kakao price prediction
Analysis by Mirae Asset Daewoo which was published in the Korea Herald proves that the messaging app would be the largest beneficiary of the increasing interest in the Bitcoin market by South Koreans. Kim Chang-Kwon, one of the analysts of the South Korean brokerage firm said, “Kakao has a direct and indirect stake of almost 24 per cent stake in Dunamu – an Upbit operator. Already, Upbit has exceeded its peak trading amount and traffic which was set in the last quarter of 2017. Hence, it is likely that Kakao will benefit from this fallout.”
Upbit, Korbit, Coinone and Bithumb are the top four virtual currency exchanges in the Asian country. Similar to other top South Korean conglomerates, Kakao also has an equity stake in the crypto and blockchain industries in addition to its holdings in Dunamu. The messaging app giants have a blockchain platform (Klatyn) and have a cryptocurrency of their own (KlLAY). Both of them were developed by ground X, a subsidiary of the company.
Based on the latest data from Bloomberg, Kakao’s stock price is valued at 485K won (about $430). Mirae Asset Daewoo believes that Kakao’s share price should reach at least $523. This expected price is attainable since Kakao’s interest in Dunamu brought more than $26 million in profits for them in 2017 alone. During that period, bitcoin and the entire crypto market were on a bullish trend, and bitcoin exceeded the $20K mark for the first time that year.
Other Analysts’ Opinion
Chang-Kwon, an experienced analyst, opined that Kakao’s investments in Dunamu will bring them up to $90 million this year unless the prediction that 2021 is a bullish market for bitcoin holders does not come true. He further remarked that Kakao’s equity will be re-evaluated once Coinbase becomes listed on the NASDAQ stock exchange.
As previously reported by Tokenhell, there is a massive surge in crypto exchange trading in South Korea. During the early parts of this month, exchanges reported transaction volume briefly exceeded that of South Korea’s stock market.
Upbit has benefited massively from the growing popularity of crypto trading in the country such that k bank (Upbit’s main banker) are planning to make their initial public offering before the end of next year. Also, the crypto trading mania has caused the bank to modify its profitability chart despite coming off an $89 million loss from two years when their operations were massively disrupted.
Tax Defaulters Can No Longer Hide
However, the government continues to enact and enforce laws that help them to monitor the digital asset market effectively, especially in this period when crypto trading seems to be the norm rather than an abnormality. One of such control measures is the mandate for exchanges and other service providers to supply all crypto transactions to the national tax service or serve 5-year jail terms for failing to do so.
While this new crypto law will take effect before the end of this month, existing crypto firms have been given a 6-month grace to conform with the new law. Also, the country’s tax authority is beaming its searchlight on the thriving crypto niche as it continues to seek people who are defaulting on their taxes by using digital currencies to hide their assets.
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