The Korean crypto markets have recently experienced a surge in trade volume, reaching heights not seen in over two years.
According to a report from Kaiko, the first quarter of 2024 marked an important milestone as the South Korean Won (KRW) surpassed the U.S. Dollar (USD) in terms of cumulative trade volume.
Competition and Shifting Dynamics
This surge in trading activity comes amid fierce competition among Korean exchanges and shifting market dynamics. Upbit, a major player in the South Korean crypto scene, has historically held a dominant position since early 2021, with an average market share of 82% over the past three years.
However, the landscape has become increasingly competitive, particularly during the recent bull run. Rivals such as Bithumb and Korbit have intensified their efforts to gain market share, with Bithumb’s introduction of a zero-fee policy in October 2023 proving particularly impactful.
Despite facing a 60% drop in annual revenue in 2023, Bithumb saw its market share triple in the months following the implementation of the zero-fee strategy. Korbit has maintained a relatively low market share, averaging less than 1% throughout 2024.
The tactics used by Bithumb and others have contributed to a surge in trade volume, resulting in KRW surpassing USD in cumulative trade volume in early March.
However, this achievement was not sustained, as KRW volumes experienced a decline in early April. Despite this, Kaiko believes the recent approval of spot BTC and ETH ETFs in Hong Kong presents a potential catalyst for renewed market sentiment across the Asia-Pacific region.
Regulatory Scrutiny and Market Shifts
Meanwhile, Uniswap Labs disclosed on April 10th that it had received a Wells notice from the U.S. Securities and Exchange Commission (SEC). The announcement caused the UNI token price to drop over 16%, and trading volumes spiked 3,000%.
In the U.S., Coinbase expanded its market share, contrasting with Binance.US’s decline due to legal issues after an SEC lawsuit last June. Binance.US now commands just 0.28% of the market share, a significant drop from its position of over 30% last year.
Kaiko also reports that last week, the 90-day correlation between BTC and the Dollar Index (DXY) fell to a negative 0.24, marking its lowest point in more than a year.
The U.S. Dollar has strengthened due to unexpected inflation spikes and rising tensions in the Middle East. However, unlike traditional safe-haven assets, BTC didn’t attract investor interest during this period and instead experienced a decline alongside other risky assets.
