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
- Dominance in South Korea: Upbit commands 80% of the total crypto trading volumes in South Korea, making it a dominant player in the region.
- Global Competition: Upbit is now in direct competition with global exchanges like Coinbase, while Binance appears to be losing market share in Asia.
- Regulatory Challenges: Despite stringent regulatory measures in South Korea, Upbit continues to thrive. Last year, the exchange faced criticism for its significant share of deposits at its primary banking partner.
- New Legislation: New laws aimed at protecting investors could inadvertently strengthen Upbit’s market position. These regulations require exchanges to bolster reserves, secure investor protection insurance, and enhance surveillance of suspicious transactions.
- Recent Developments: Upbit has recently decided to submit deposits and withdrawals exceeding $1 million. Meanwhile, Singapore-based Crypto.com has 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
- High Participation: Despite the $40 billion collapse of the TerraUSD stablecoin, South Korean traders remain highly active in the crypto market. Over 6 million Koreans, more than 10% of the population, engaged in cryptocurrency trading on registered exchanges in the first half of last year.
- Political Impact: The widespread interest in crypto has become a political issue in Seoul. Candidates in recent parliamentary elections pledged to delay taxes on digital assets or ease restrictions on investing in US Bitcoin ETFs.
- Altcoin Popularity: Altcoins, smaller tokens beyond Bitcoin and Ethereum, account for 80% of the trading volume on Korean exchanges. This is in stark contrast to global platforms, where altcoins represent around 50% of the trading volume.
Conclusion
Upbit’s rise to the top five global crypto exchanges highlights the growing influence of South Korea in the cryptocurrency market. With a strong user base and increasing trading volumes, Upbit is well-positioned to continue its upward trajectory, despite regulatory challenges and fierce competition from global players.
