Recently, the trading volume in the South Korean cryptocurrency market has significantly increased, peaking at levels unseen since nearly two years ago.
In the first quarter of 2024, the South Korean Won (KRW) took the lead over the U.S. Dollar (USD) in total trade value based on a Kaiko report.
Competition and Shifting Dynamics
Amidst intense rivalry amongst Korean cryptocurrency exchanges and evolving market conditions, there’s been a significant increase in trading. Notably, Upbit, a prominent figure in the South Korean crypto sphere, has maintained a commanding presence since early 2021, accounting for an average of 82% of the market share during the past three years.
Despite the landscape growing more cutthroat, especially during the latest market surge, competitors like Bithumb and Korbit have ramped up their strategies to capture larger market shares. Notably, Bithumb’s implementation of a no-fee policy in October 2023 has significantly influenced the competition.
In contrast to the significant 60% decrease in yearly income for Bithumb in 2023, their market share experienced a threefold increase during the subsequent months after implementing a zero-fee policy. On the other hand, Korbit has managed to keep a modest market share below 1%, averaging throughout the entirety of 2024.
In early March, the trading strategies employed by Bithumb and similar platforms led to a significant increase in transaction activity. As a result, the total value of trades conducted in Korean Won (KRW) exceeded that of the US Dollar (USD).
Although this advance didn’t last, as KRW trading volumes saw a drop starting in early April. Yet, Kaiko remains optimistic that the recent green light for spot Bitcoin and Ethereum ETFs in Hong Kong could rekindle market enthusiasm throughout the Asia-Pacific area.
Regulatory Scrutiny and Market Shifts
In the meantime, Uniswap Labs revealed on April 10th that they had been given a warning notice, known as a Wells notice, from the US Securities and Exchange Commission (SEC). This disclosure led to a significant drop in approximately 16% in the UNI token’s value, while trading volumes saw an immense surge of around 3,000%.
In the United States, Coinbase has grown more prominent in the market compared to Binance.US, which has experienced a decrease due to legal troubles following an SEC lawsuit in June 2021. Currently, Binance.US holds only 0.28% of the market share – a substantial decline from its previous dominance of over 30% in the past year.
Last week, Kaiko noted a significant decrease in the correlation between Bitcoin (BTC) and the Dollar Index (DXY), reaching a low of -0.24 – their weakest link in over a year.
During recent times, the US Dollar has gained power unexpectedly due to inflation flare-ups and heightened conflicts in the Middle East. In contrast to typical secure investments, Bitcoin failed to draw in investors during this turmoil and instead saw a drop, sharing the same fate as other high-risk assets.
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2024-04-20 14:06