Upbit Unveils GIWA Ethereum Layer-2 Amid Robust Asian Crypto Demand

South Korean crypto exchange Upbit's parent company, Dunamu, has launched GIWA Chain, an Ethereum Layer-2 solution, positioning itself to compete with global blockchain giants. This development occurs amidst surging regional demand for cryptocurrencies and broader macroeconomic shifts, including a notable increase in central bank gold holdings.

U.S. equity markets observed developments in the cryptocurrency sector and shifts in global reserve assets, as South Korea's dominant crypto exchange, Upbit, officially launched its new GIWA Chain. This Ethereum Layer-2 solution aims to enhance transaction speed and accessibility within the Web3 ecosystem, marking a strategic expansion for Upbit's parent company, Dunamu. The announcement comes against a backdrop of escalating demand in Asian cryptocurrency markets and significant de-dollarization trends among central banks.

The GIWA Chain Launch and Market Positioning

At the Upbit D Conference 2025 in Seoul, Dunamu formally announced the testnet launch of GIWA Chain, an Ethereum Layer-2 (L2) blockchain built on Optimism Foundation's OP Stack. Named "Global Infrastructure for Web3 Access" and referencing traditional Korean roof tiles, GIWA is engineered to provide faster transaction processing, targeting one-second block times, while leveraging Ethereum's inherent security through optimistic rollups. Developers can utilize existing Ethereum tools due to its compatibility with the Solidity programming language and Ethereum Virtual Machine (EVM).

This initiative strategically positions Upbit to intensify competition with other major exchanges that have developed their own blockchain networks, such as Coinbase's Base (also built on OP Stack) and Binance's BNB Chain. Upbit, which processes approximately $2.25 billion to $2.5 billion in daily trading volume and commands roughly 73% of the South Korean crypto trading market, holds a significant regional advantage. South Korea alone registered $1 trillion in crypto purchases between July 2024 and June 2025, ranking it as the second-largest market globally, providing GIWA with a substantial user base and potential for rapid adoption.

Analysis of Market Reaction and Regional Dynamics

The introduction of GIWA Chain represents a move by Dunamu to evolve beyond traditional exchange services into a comprehensive Web3 infrastructure provider. This shift seeks to facilitate the development of Asian-native decentralized financial applications and could enable instant, low-cost cross-border payments through a planned Korean won stablecoin. The project aligns with South Korean government initiatives promoting regulatory frameworks for local stablecoins to bolster currency sovereignty. While promising enhanced scalability and reduced transaction costs, the initial operator-controlled sequencing of GIWA has raised some centralization concerns within the developer community.

Regional cryptocurrency demand continues to exhibit strength, as evidenced by the Bitcoin Korean Premium Index. This index climbed 130% from July to September, reaching 0.61 on September 8. This significant rise indicates robust local demand for Bitcoin relative to global markets, driven in part by escalating trade tensions and a "flight-to-safety" sentiment among Asian traders.

Broader Context: De-Dollarization and Gold Accumulation

Beyond the cryptocurrency market, global financial trends reflect a broader movement toward diversification of reserve assets. China's central bank extended its gold-buying streak for the tenth consecutive month in August, increasing its gold holdings by 60,000 ounces to 74.02 million ounces. This accumulation is part of a larger strategy to diversify reserves amidst geopolitical risks and concerns regarding the long-term stability of U.S. dollar-backed assets. Gold's share of China's total foreign exchange reserves reached a record 7.64%.

This trend is not isolated to China. Global central banks added 166 tonnes of gold in the second quarter, bringing total central bank gold holdings to approximately 36,700 tonnes, representing about 27% of foreign central bank reserves—the highest percentage in 29 years. Notably, central banks collectively now hold more gold than U.S. Treasury securities for the first time since 1996.

"foreign central banks now officially hold more gold than US Treasuries for the first time since 1996," Tavi Costa, a macro strategist at Crescat Capital, observed, describing this as "likely the beginning of one of the most significant global rebalancings we've experienced in recent history."

Comex gold futures have responded, rising 37.9% year-to-date to $3,639.8 an ounce, with spot gold prices surpassing $3,500 per ounce. Analysts anticipate continued robust demand, projecting further price gains in the near term.

Looking Ahead

The success of GIWA Chain will hinge on its ability to attract developers, secure liquidity, and effectively differentiate itself within an increasingly competitive Layer-2 landscape, while navigating evolving regulatory frameworks in South Korea. For the broader cryptocurrency market, increased Bitcoin demand in Asia, fueled by regional adoption and de-dollarization trends, could lead to further capital inflows in the coming months. Meanwhile, the sustained institutional demand for gold is expected to provide a strong price floor, as central banks continue to recalibrate their portfolios in response to geopolitical and economic shifts."

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[1] Upbit Rumored to Launch GIWA Layer-2 Chain on Ethereum Amid Asian Crypto Surge[2] Upbit Launches Giwa Ethereum L2 Chain on Testnet Platform - CoinMarketCap[3] Upbit Announces The Launch of “The GIWA Chain” - Tekedia

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The current market rally is predominantly driven by the artificial intelligence sector, showcasing significant gains in chipmakers and AI infrastructure companies. This rally is underpinned by strong earnings and robust demand, distinguishing it from the speculative fervor of the dot-com bubble. While Oracle experienced a post-earnings fluctuation, the broader market is witnessing a resurgence in IPO activity. Concerns about a narrow market breadth persist, with a few dominant technology firms accounting for a substantial portion of overall index gains. Opening U.S. equities have demonstrated a pronounced divergence through the first half of 2025, with the technology sector, particularly companies deeply entrenched in artificial intelligence (AI), spearheading significant market gains. This specialized rally is fueled by strong corporate earnings and an escalating demand for AI infrastructure, establishing a distinct narrative for current market performance. The Event in Detail The market's momentum is largely concentrated in chipmakers and companies providing AI infrastructure. Nvidia Corp. (NVDA) has seen its stock climb over 13% this year, pushing its market capitalization close to $4 trillion, surpassing the gross domestic product of some nations. Other significant advancers include Palantir Technologies Inc. (PLTR), up over 83%, alongside strong performances from Broadcom Inc. (AVGO), Super Micro Computer Inc. (SMCI), and Arm Holdings Plc (ARM). Nvidia's first-quarter earnings report highlighted a 73% year-over-year increase in data center revenue, underscoring the robust demand driving this sector. Oracle Corp. (ORCL) shares experienced notable volatility, slipping 6.2% after a prior 36% surge. This initial surge, which marked Oracle's best trading day since 1992, followed a "blowout earnings report" propelled by multibillion-dollar orders for its cloud services. The company's backlog reportedly ballooned, with analysts from Deutsche Bank commending the "truly awesome results" and affirming Oracle's position as a "leader in AI infrastructure." Despite the recent dip, ORCL remains up approximately 90% since the start of the year. The extraordinary performance of Oracle shares briefly propelled co-founder Larry Ellison past Elon Musk as the world's richest person, with Bloomberg estimating his net worth at $393 billion. This shift underscores the immense wealth generation occurring within the AI-driven technology landscape. Simultaneously, the global Initial Public Offering (IPO) market is undergoing a significant resurgence in 2024 and the first half of 2025. IPO proceeds increased by 17% compared to the previous year, reaching $61.4 billion from 539 deals. The U.S. market alone witnessed 165 IPOs, a 76% increase. This renewed activity is attributed to stabilizing inflation, plateauing interest rates, and strong stock valuations, with Technology, Media, and Telecommunications (TMT) companies, especially those focused on AI, leading the charge. Analysis of Market Reaction The current market rally is not merely speculative but is underpinned by "hard data, strong earnings" and a laser focus on AI infrastructure. This analytical rigor differentiates the present environment from the dot-com bubble of the late 1990s. Economists and strategists note that today's technology giants exhibit significantly higher earnings growth and lower valuation multiples compared to their predecessors during the dot-com era. The Magnificent Seven — Alphabet (GOOG), Amazon (AMZN), Apple (AAPL), Meta Platforms (META), Microsoft (MSFT), Nvidia (NVDA), and Tesla (TSLA) — currently trade at an average price-to-earnings (P/E) ratio of 28x over the past 12 months. This is markedly lower than the 82x average P/E ratio of market leaders like Microsoft, Cisco, Lucent, Nortel, and AOL at the peak of the dot-com bubble in 1999. Furthermore, the prevailing monetary policy environment contrasts sharply with the period preceding the dot-com crash. During the late 1990s, the U.S. Federal Reserve implemented significant interest rate hikes. In the current cycle, the Fed is widely anticipated to lower key interest rates by approximately one percentage point in the coming months, a move that could further support equity valuations by reducing borrowing costs for corporations and making equities more attractive relative to fixed-income investments. Broader Context & Implications Despite the robust performance of the AI sector, the rally exhibits a notable lack of breadth. While AI and chipmakers are soaring, other sectors such as consumer stocks, retail giants, and industrials are largely "treading water (or worse, drowning in it)." 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While the current IPO landscape benefits from greater private equity involvement and a focus on more mature companies prior to public listing compared to the dot-com era, the rapid growth of AI and heightened investor interest could still lead to instances of overvaluation. Expert Commentary Analysts at Loop Capital have set an ambitious price target for Nvidia stock, projecting a path to $6 trillion by 2027, assuming continued momentum in AI infrastructure spending. Avery Marquez, Director of Investment Strategies at Renaissance Capital, observed the renewed vigor in the IPO market: > "The IPO market is in a good position at the moment, and it looks like the long-awaited pickup is finally going to materialize." UBS Global strategists, in evaluating the current market, have expressed caution but see fundamental differences from past bubbles: > "There is little evidence of a market bubble at present, and we would look to benefit from AI-driven momentum in the stock market with a broadly diversified portfolio." Looking Ahead The sustainability of the current AI-driven rally remains a key focus for investors. Potential risks include a slowdown in AI capital expenditures, the re-emergence of political instability, or the possibility that current expectations for AI may be running ahead of reality. While the long-term transformative potential of AI is widely acknowledged, there is a short-term risk of over-investment and misallocation within the sector. The IPO market is expected to see a steady flow of new issuances, but it remains susceptible to broader market stability and investor confidence, particularly given ongoing uncertainties around trade tariffs and inflation. 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US Administration Scrutiny on Chinese Pharma R&D Raises Market Concerns

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This represents a significant increase from previous years, with China accounting for 21% of licensing spending in both 2023 and 2024, up from single digits prior. Major pharmaceutical companies, including AstraZeneca, Bristol Myers Squibb, Eli Lilly, and GSK, have collectively pledged approximately $150 billion to license novel treatments from China over the last five years. These deals often involve billions of dollars to secure exclusive development and sales rights for candidate drugs in overseas markets, illustrating the deep integration of Chinese innovation into global pharmaceutical pipelines. Analysis of Market Reaction The prospect of increased US scrutiny on Chinese pharmaceuticals immediately impacted market sentiment, leading to heightened volatility. Shares of Chinese biotech companies listed in the US, such as BeiGene, Zai Lab, and Legendary Biotech, experienced initial stock price declines. 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