South Korea’s virtual asset market continues to lose trading momentum, and the competitive balance among the country’s five won-based exchanges is shifting with it. As activity weakens, capital is concentrating more heavily on the platforms with deeper liquidity, while smaller exchanges are looking for ways out through securities firm partnerships, institutional market plans and business restructuring.
Trading volume falls as Upbit extends its lead
According to Odaily, citing NexBlock, the combined trading value of South Korea’s five major won-based exchanges — Upbit, Bithumb, Coinone, Korbit and Gopax — came to about $366.58 billion in the first half of the year, down 54.6% year over year.
From July 1 to July 27, combined trading volume across the five exchanges totaled about KRW 17.34 trillion, a 16.9% drop from the same period of the previous month. Upbit recorded roughly KRW 11.69 trillion in trading volume. That was down 10%, but its market share still climbed from 62.3% to 67.4%.
Bithumb’s trading volume fell to KRW 4.71 trillion, and its market share slipped from 30.7% to 27.1%. The gap between the two exchanges widened to 40.3 percentage points.
Lower volatility weighs on activity
The report said market observers see declining volatility in bitcoin and altcoins as a major reason trading has contracted. In the first half of the year, bitcoin’s average daily volatility stood at 1.25%, while an altcoin index posted volatility of 1.79%. Both were below the 4.67% reading for South Korea’s KOSPI stock index.
With market liquidity tightening, investor willingness to trade has weakened. That leaves exchanges that rely mainly on fee income under greater pressure.
Smaller exchanges look beyond spot trading
At the same time, second-tier and smaller exchanges have started seeking closer links with traditional financial institutions. Industry participants, according to the report, see the changes in South Korea’s exchange sector as broadly in line with global developments.
The report pointed to Coinbase in the United States as one example. Its trading revenue has recently faced pressure, but the company has reduced its dependence on transaction fees through non-trading businesses such as subscription services and custody. Competition in the market is shifting away from a pure fight over trading volume and toward financial ecosystems, institutional services and asset infrastructure.