Altcoin Frenzy in Korea: Exchange Goliath Gobbles Up 87% of Trading Volume
South Korea’s crypto scene is booming, and altcoins are leading the charge. But one exchange reigns supreme: a domestic giant controls a staggering 87% of altcoin trading volume, leaving international competitors in the dust.
Local Hero, Global Dominance: This unnamed Korean exchange has become a haven for altcoin enthusiasts, offering a wider selection and often higher liquidity than international platforms. This attracts both local and international investors, further solidifying its market share.
Upbit, Korea’s largest cryptocurrency exchange, records 87% of its total trading volume dedicated to altcoins, as per recent data analysis. This dominance in altcoin trading underscores the significant interest and activity surrounding alternative cryptocurrencies on the platform, reflecting the preferences and trading behavior of Upbit’s user base.
Altcoins Make Up 87% Of Upbit’s Trading Volume.
In a recent post on X, Ki Young Ju, the CEO and founder of CryptoQuant, compared the trading volumes of Korean and American cryptocurrency exchanges.
In this context, we refer to the total number of tokens of a specific cryptocurrency or multiple coins involved in trading activities on a particular platform or a group of platforms as “trading volume.”
The platform sees high interest when a significant number of tokens are traded, indicating active selling among users. Limited investor interest is indicated by low trading values, with only a few tokens used in platform trading.
Although altcoins currently contribute the largest share of trading volume to Coinbase, the most prominent American exchange, their dominance is moderate.
On the other hand, alts currently make up $34.2 billion in volume on Upbit, the largest Korean platform, 87% of the exchange’s total volume.
This would imply that Korean users, who also trade Bitcoin and Ethereum fairly frequently, are more interested in altcoins than American investors.
This variation in conduct could be attributed to the kind of investors who use the different platforms. According to Ju’s response to a user’s comment on the post, “The volume is primarily from retailers. This is mainly because Korean exchanges prohibit institutional investors and foreign users by law.”
Altcoin Playground: The exchange caters to diverse investor preferences, providing access to a vast array of established and emerging altcoins. This variety fuels trading activity and attracts investors seeking specific opportunities beyond Bitcoin and Ethereum.
Regulation’s Double-Edged Sword: Korea’s strict KYC/AML regulations, while enhancing security, limit access for some international investors. This inadvertently benefits the dominant domestic exchange, as foreign competitors face hurdles in attracting Korean users.
Challenges on the Horizon?: Regulatory changes or the emergence of equally competitive international platforms could disrupt the market share dominance. However, the exchange’s established user base and deep liquidity give it a significant advantage.
Beyond Altcoins: While altcoins currently reign, the exchange also facilitates significant Bitcoin and Ethereum trading. This diversification positions it well for potential shifts in market trends.
Investor Insights: Understanding this exchange’s dominance is crucial for anyone navigating the Korean crypto market, especially regarding altcoins. Investors should consider its liquidity, security, and regulatory compliance when making decisions.
The Future Unfolds: Whether this exchange maintains its lead or faces new challengers remains to be seen. One thing is certain: Korea’s altcoin scene is vibrant, and this exchange plays a central role in its evolution.
Institutional investors primarily use Coinbase. This could skew the distribution of trading volume. However, retailers would also be on the platform.
The creator of CryptoQuant has shared a chart that contrasts the trading volume of these exchanges with Binance. This provides context for the position of the Korean platforms within the more significant industry.
The current total volume on Korean exchanges is $69.4 billion, or roughly 31% of the $220 billion volume on Binance. Based on trading volume, the latter is the biggest cryptocurrency exchange globally.
This indicates that the altcoin-dominant Korean exchanges have a 12% global influence, the analyst claims.
BNB Cost
The biggest cryptocurrency in the market, BNB, has seen a 4% increase in value over the last day, bringing its current price to $316.
