South Korea’s cryptocurrency exchange landscape is undergoing a dramatic transformation. Upbit, the country’s leading exchange, has experienced a noticeable decrease in market share, falling below 70% for the first time since January. This development marks a pivotal change in the competitive dynamics of the South Korean crypto market.
The prominent crypto market data provider Kaiko shared a Twitter thread recently, incorporating the recent developments in South Korea’s cryptocurrency exchange landscape:
The decline in Upbit’s market share, now standing at 65.7%, could be attributed to the aggressive strategies employed by its rivals, Bithumb and Korbit. These exchanges have introduced zero-fee promotions in the past two months, significantly attracting users and increasing trading volumes. Notably, Bithumb has seen a substantial increase in its volume, now at 32.7%, indicating a strong shift in user preferences.
This shift in market dynamics comes amidst regulatory scrutiny and political controversy. In May 2023, South Korean authorities conducted raids on the offices of Upbit and Bithumb. This was part of an investigation involving politician Kim Nam-kuk, who was accused of liquidating over $4 million in crypto assets before enforcing new regulations by the Financial Action Task Force in March 2023. The enforcement of the so-called “Travel Rule” and the subsequent revelations have sparked a widespread public outcry and debates over potential conflicts of interest.
Adding to the market’s volatility, Upbit took the unprecedented step of temporarily halting all deposit and withdrawal services for the Aptos crypto token in September 2023. This decision followed the detection of suspicious activities, including a fake airdrop that targeted approximately 400,000 wallets with a token resembling Aptos.
Meanwhile, Korbit has been making strategic moves to increase its market presence. The exchange is leveraging innovative strategies to attract a larger user base, effectively challenging the previously unassailable position of Upbit in the market. Furthermore, reports indicate that Coinone, another significant player in the market, is planning a comprehensive platform upgrade. This upgrade would enhance user experience and security features, intensifying competition among South Korean crypto exchanges.
The South Korean cryptocurrency exchange market is witnessing a dynamic shift. The once-dominant Upbit faces fierce competition from Bithumb and Korbit, with their aggressive marketing strategies and zero-fee promotions reshaping user preferences. The sector is also grappling with regulatory challenges and political controversies, adding layers of complexity to an already competitive landscape.
