Overview of South Korea's Crypto Landscape
According to research by DeSpread, South Korea has approximately 6 million cryptocurrency investors, representing over 10% of the population. This significant adoption rate highlights the country's active participation in the crypto market, predominantly centered around centralized exchanges (CEXs).
Key insights are derived from data of the top four exchanges:
- Upbit (80% market share)
- Bithumb (15–20%)
- Coinone (3–5%)
- Korbit (<1%)
Exchange Performance and Market Trends
Declining Global Volume, Rising Local Influence
- Global CEX trading volume peaked in March 2023 but has since declined.
- Despite this, South Korean exchanges saw a higher relative share compared to giants like Binance—rising from 7% in March to 16% by September.
- Upbit alone recorded $360 billion in February, capturing 80% of Korea’s crypto trade volume.
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Competitive Dynamics
Bithumb’s Zero-Fee Experiment
- In October 2023, Bithumb implemented a zero-trading-fee policy, temporarily boosting its market share to 20%.
- The effect was short-lived, reverting to pre-policy levels within weeks.
- Sustainability concerns arise as fees are a primary revenue source for exchanges.
Upbit vs. Coinbase: Investor Profiles
| Metric | Upbit (Korea) | Coinbase (Global) |
|-------------------|---------------------------|-----------------------------|
| Top Traded Assets | Altcoins (e.g., LOOM, XEC) | BTC, ETH (85% institutional) |
| Risk Appetite | High (retail-driven) | Low (stable portfolios) |
Unique Traits of the Korean Market
Popular Cryptocurrencies
- LOOM, XEC, and FLOW dominate trading volume (62%, 55%, and 43% respectively).
- "Kimchi coins" (e.g., $SBD, $MOC) trade exclusively on Upbit, reflecting local speculative demand.
Deposit/Withdrawal Trends
- Tron network is favored over Ethereum for transfers (5x more usage).
- Reasons: Lower fees, faster transactions, and focus on cross-exchange arbitrage rather than DeFi.
👉 Learn about Tron’s low-cost transfers
FAQs
1. Why does Upbit dominate Korea’s crypto market?
Upbit’s user-friendly interface, extensive altcoin listings, and early market entry have solidified its 80% market share.
2. Are zero-fee policies sustainable for exchanges like Bithumb?
Unlikely—long-term revenue loss may force reevaluation, as seen in Bithumb’s temporary gains.
3. What drives Korean investors’ preference for altcoins?
High-risk tolerance and speculative opportunities, unlike institutional-heavy markets (e.g., Coinbase).
4. How does Tron outperform Ethereum in Korea?
Cost efficiency and speed make Tron ideal for frequent cross-exchange transfers.
5. Will global crypto projects succeed in Korea without localization?
No—regional preferences (e.g., kimchi coins) demand tailored Go-To-Market (GTM) strategies.
Conclusion
South Korea’s crypto market is retail-driven, altcoin-heavy, and dominated by Upbit. Unique behaviors—like Tron network usage and kimchi coin trading—underscore the need for localized approaches.
For exchanges, balancing innovation (e.g., zero fees) with sustainability remains critical.
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