- Upbit is the top exchange in South Korea, with an 82% market share.
- Bithumb and Korbit debuted zero-fee campaigns in 2023.
- Volume on Bithumb surged, but the firm reported a 60% decline in revenue in 2023.
Crypto exchanges in South Korea are engaged in a fee war, according to a report from Kaiko Research, as the major platforms operating in the country seek to gain an upper hand.
Kaiko stated in the report that the leading exchange in the South Korean market since 2021 has been Upbit, with an average market share of 82% over the past three years. However, the report confirmed that the competition has increased following the recent surge in the price of digital assets. The increased competition was the result of Bithumb and Korbit, two regulated South Korean crypto exchanges, debuting zero fee campaigns in 2023, attracting investors in the country. The report further revealed:
While Korbit’s market share did not significantly increase, averaging less than 1% in 2024, Bithumb’s market share tripled in the months following the introduction of its zero-fee policy in October 2023.
Although trading volume surged on Bithumb, the digital asset trading platform witnessed a 60% decline in annual revenue in 2023, which “may have prompted the exchange to discontinue its zero-fee campaign on February 5, just five months after its launch,” Kaiko noted. Furthermore, Kaiko added:
Overall, the improving macroeconomic environment and fierce competition among Korean exchanges has boosted trade volume on Korean markets which hit its highest level in more than two years in early March.
Notably, the report revealed that in the first quarter of 2024, the South Korean Won (KRW) surpassed the United States Dollar (USD) in terms of cumulative trade volume following the zero-fee tactics used by the exchanges.On the other hand, Kaiko believes that the approval of spot Bitcoin exchange-traded funds (ETFs) in Hong Kong could instill bullish sentiment in the Asia Pacific crypto markets, which also include South Korea.
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