Crypto Market Dominance: Upbit Handles 80% Of South Korean Trading Volume

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As an analyst with a background in the crypto industry and a particular focus on Asian markets, I find Upbit’s recent dominance in the South Korean market and its entry into the top-five global exchanges list quite intriguing. The exchange’s 80% share of the country’s trading volume is a significant achievement, especially when compared to other prominent crypto hubs.

As a market analyst, I’ve reviewed the latest data and found that Upbit, a South Korean cryptocurrency exchange, holds more than an 80% share of the local crypto market. Impressively, it has climbed up to fifth place in the ranking of the top five global exchanges.

Several competing platforms have failed to dethrone the exchange’s market supremacy in the nation, while the impending regulatory structure poses additional challenges for them.

Upbit Enters The Top-Five Global Crypto Exchange List

Bloomberg reported that Upbit achieved a notable milestone by surpassing the dominance of the leading Korean cryptocurrency exchange, which accounts for around 80% of the country’s trading volume.

In South Korea, Upbit is the dominant crypto exchange, handling over 80% of the nation’s trading volume. It ranks among the top five global exchanges by trading volume, approaching the stature of Coinbase. (BBG)

— NekoZ (@NekozTek) April 25, 2024

Significantly, Upbit’s prominence has not been matched by other exchanges within major crypto markets. As reported by Bloomberg, approximately 6 million Koreans, equating to around 10% of the population, engaged in cryptocurrency trading during the first half of 2023.

During this bull market, Upbit’s trading volume has surged, pushing it up to rank fifth among all international exchanges. Upbit’s impressive daily trading volume of $2.84 billion is almost equal to Coinbase’s, which stands at $2.86 billion.

The report indicates that nearly one-fifth of the total deposits among South Korea’s banking partners came from exchange transactions last year. In contrast, altcoins make up around 80% of the trading volume for Korean exchanges, while global platforms record relatively smaller volumes, at approximately 50%.

In spite of the impending crisis surrounding Do Kwon and Terra Labs’ $40 billion collapse, the cryptocurrency market in Korea remains vibrant and is renowned as the global hub for crypto traders who are particularly daring and enthusiastic about high-risk, high-reward digital assets.

In addition, it has been disclosed that the South Korean Won became the preferred currency for cryptocurrency transactions worldwide during the first quarter of 2024. This significant increase indicates a strong interest and growing trend towards cryptocurrencies among South Koreans.

I noticed that as the election season approached, contenders made efforts to win over voters by pledging to address regulations and taxes.

Does The New Regulatory Framework Favor Upbit’s Dominance?

Starting from July 2024, South Korean authorities will enforce the Virtual Asset User Protection Act. This regulatory overhaul introduces more stringent conditions and penalties for digital asset exchanges. Violations of these rules could result in severe consequences, including imprisonment for up to life in prison for criminal offenses.

In addition, it is necessary for operators to take action to fulfill their obligations following hacking incidents or system malfunctions. These responsibilities entail substantial “financial resources and workforce,” as stated by Nam Hyeon Joon, a representative from South Korea’s second largest cryptocurrency exchange, Bithumb.

As a financial analyst, I would rephrase it as follows: Following the Terra Labs collapse, there’s been a new regulatory landscape put in place with the primary intent of safeguarding investors. However, smaller exchanges like Huobi Korea, Cashierest, and Coinbit have faced the brunt of this legislation since its implementation last year, leading to their shutdown.

I, Simon Seoohoon Kim, CEO of Hashed, Venture Capital firm, hold the view that established crypto exchanges, such as Upbit, will facilitate the process for both current and new market participants in meeting regulatory requirements. The financial implications of adhering to these regulations could prove significant for all involved parties.

Min Seung Kim, an analyst at Korbit Research, agrees with the assessment and indicates that the competition among cryptocurrency exchanges is likely to decrease since trading activity is becoming more centralized around the leading exchanges.

Competitors aiming to rival Upbit’s market supremacy have adopted a zero-fee strategy, as mentioned in the report. Bithumb momentarily contended with Upbit when it attained a maximum market share of 39.2% in January. However, following the conclusion of its promotional offer, its market share significantly decreased by over 50%.

In summary, gaining access to the South Korean cryptocurrency scene remains challenging. As demonstrated by Crypto.com’s recent experience, adhering to the nation’s regulatory guidelines demands a well-planned approach and substantial means.

Crypto Market Dominance: Upbit Handles 80% Of South Korean Trading Volume

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2024-04-26 07:39