South Korea’s appetite for cryptocurrency is on the rise as investors increasingly opt for high-risk, high-reward investments. The Asian cryptocurrency markets are experiencing a resurgence, with the South Korean crypto exchange Upbit now securing a spot among the top five global exchanges. Recent market reports indicate that the Korean Won has overtaken the USD as the most-used fiat currency for trading Bitcoin and other digital assets.
Upbit’s Popularity and Trading Skyrockets
Upbit offers a wide array of cryptocurrencies on its platform, providing easy access to users and capturing a significant share of South Korea’s crypto market. Upbit alone accounts for 80% of the total crypto trading volumes in South Korea, highlighting its dominance in the region. This positions Upbit in direct competition with global players like Coinbase, while top market players like Binance appear to be losing market share in Asia.
Interestingly, Upbit’s rise comes despite increasing regulatory measures in South Korea. Last year, Upbit’s clientele made up nearly a fifth of its primary banking partner’s overall deposits, drawing significant criticism from a South Korean legislator.
However, new legislation aimed at protecting investors following the collapse of TerraUSD, founded by South Korean entrepreneur Do Kwon in 2022, may inadvertently strengthen Upbit’s dominant market position. The updated regulatory framework requires crypto exchanges to bolster reserves, secure investor protection insurance, and intensify surveillance of suspicious transactions. As a result, Upbit recently decided to submit deposits and withdrawals exceeding $1 million.
Earlier this week, Singapore-based Crypto.com postponed its plans to launch in South Korea, citing the need for more time to consult with regulators.
South Korea’s Mass Appeal for Crypto
Despite the $40 billion collapse of the TerraUSD stablecoin, South Korean traders continue to show high participation in the crypto space, demonstrating their appetite for high-risk, high-reward investments.
According to official data, over 6 million Koreans, representing more than 10% of the population, engaged in cryptocurrency trading on registered exchanges in the first half of last year. The widespread interest in crypto has become a political issue in Seoul, with competing candidates in recent parliamentary elections pledging to postpone taxes on digital assets or ease constraints on investing in US Bitcoin ETFs.
Altcoins, smaller tokens beyond Bitcoin and Ethereum, account for 80% of the trading volume on Korean exchanges, a stark contrast to global platforms where they represent around 50%, according to data from CryptoQuant. Ho Chan Chung, head of marketing at Korean analytics firm CryptoQuant, noted this trend.
