Overview
South Korea’s appetite for cryptocurrency is on the rise, with investors increasingly opting for high-risk, high-reward investments. This trend has propelled the South Korean crypto exchange Upbit into the top five global exchanges, challenging industry giants like Binance and Coinbase. Recent market data indicates 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 Surge
Upbit offers a diverse range of cryptocurrencies, making it a dominant player in South Korea’s crypto market. The platform accounts for 80% of the total crypto trading volumes in the country, putting it in direct competition with global leaders like Coinbase. Meanwhile, Binance appears to be losing market share in Asia.
Despite increased regulatory measures in South Korea, Upbit has continued to grow. Last year, the exchange’s clientele made up nearly a fifth of its primary banking partner’s total deposits, attracting criticism from a South Korean legislator. New legislation aimed at protecting investors after the collapse of TerraUSD, founded by South Korean entrepreneur Do Kwon in 2022, could further solidify Upbit’s market dominance. The updated regulations require crypto exchanges to bolster reserves, secure investor protection insurance, and enhance surveillance of suspicious transactions. In response, Upbit recently decided to submit deposits and withdrawals exceeding $1 million.
South Korea’s Mass Appeal for Crypto
Despite the $40 billion collapse of the TerraUSD stablecoin, South Korean traders remain highly active in the crypto space, demonstrating a strong appetite for high-risk, high-reward investments. Official data shows that over 6 million Koreans, more than 10% of the population, engaged in cryptocurrency trading on registered exchanges in the first half of last year. This widespread interest has become a political issue in Seoul, with candidates in recent parliamentary elections pledging to delay taxes on digital assets or ease restrictions on investing in US Bitcoin ETFs.
Altcoins, or smaller tokens beyond Bitcoin and Ethereum, account for 80% of the trading volume on Korean exchanges, compared to around 50% on global platforms, according to data from CryptoQuant. Ho Chan Chung, head of marketing at Korean analytics firm CryptoQuant, noted this significant difference.
