[NEWS] South Korean won surpasses dollar to become world leader in cryptocurrency trading; Japanese yen leaves far behind

It has been revealed that the Korean won (KRW) surpassed the US dollar (USD) to become the world's top cryptocurrency trading volume in the first quarter of 2024. This was revealed by a report from research firm Kaiko.

The background to this is said to be the intensifying fee competition among cryptocurrency exchanges in Korea, with many exchanges offering fee-free campaigns.

According to the report, the cumulative trading volume of the Korean won on centralized cryptocurrency exchanges in the first quarter of 2024 reached $456 billion (approximately 70.5 trillion yen). Meanwhile, the trading volume of the US dollar was $445 billion (approximately 68.8 trillion yen).

Kaiko analyzed that "due to the improving macroeconomic environment and fierce competition between cryptocurrency exchanges in Korea, trading volume in the country's cryptocurrency market has increased, reaching its highest level in more than two years in early March."

South Korea's leading cryptocurrency exchange, Upbit, has held 82% of the country's cryptocurrency market since the beginning of 2021. Other cryptocurrency exchanges, including Bithumb, are fighting to catch up.

Bithumb's market share tripled after it launched a fee-free campaign in October last year. However, while the campaign increased trading volume, it does not seem to have translated into revenue. Bithumb has reported that it expects its annual revenue to fall by 60% in 2023. As a result, the exchange's fee-free campaign ended in early February 2024.

According to the report, the third place was the euro with $59 billion (approximately 9.1 trillion yen), the fourth place was the Turkish lira with $50 billion (approximately 7.73 trillion yen), and the fifth place was the Japanese yen with $42 billion (approximately 6.5 trillion yen). From this result, the Japanese yen traded more than 10 times higher than the won, which came in first.

Kimchi Premium: South Korea leads cryptocurrency price rise

This activation of cryptocurrency trading in South Korea was also evident last month. While Bitcoin (BTC) was trading at around $67,000 (approximately ¥9.9 million at the time) on cryptocurrency exchanges in many countries, a discrepancy was observed in South Korea, with the price recorded at around $72,000 (approximately ¥10.65 million at the time).

This price discrepancy between cryptocurrency exchanges in other countries is commonly known as the "Kimchi Premium," and is one indicator of how active cryptocurrency trading is in South Korea.

In addition, since both the ruling and opposition parties in South Korea have shown a positive policy regarding cryptocurrency, there is a possibility that trading will continue to be active in the future. In the general election held recently, the largest opposition party, the Democratic Party of Korea, won a landslide victory, winning a majority.

The Democratic Party of Korea plans to approve a spot cryptocurrency ETF, similar to the Bitcoin spot ETF that is trading well in the United States, so some impact may be seen in the future in the market.

Reference: Report
Image: Shutterstock

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