In Q1 of 2024, the South Korean won emerged as the world’s most traded fiat currency against cryptocurrencies, surpassing the US dollar in trading volume. According to a report by Kaiko on April 15, the won accounted for over $456 billion in trading volume on centralized crypto exchanges, outpacing the $455 billion in US dollar volume.
This surge in dominance is attributed to the “fee war” between Korean crypto exchanges, which has intensified competition and boosted trade volume. The report highlights the improving macroeconomic environment and fierce competition among Korean exchanges as key factors driving the increased trade volume.
In comparison, Euro-denominated trading pairs accumulated only $59 billion in cumulative volume, placing them third for the first quarter of 2024.
Upbit, as South Korea’s leading crypto exchange, has maintained over 82% of the region’s market share since 2021. However, increased competition led to rival exchanges like Bithumb and Korbit launching zero-fee campaigns in late 2023. While Korbit’s market share remained below 1%, Bithumb experienced a significant increase in market share following the introduction of zero-fee policy trading. However, this aggressive strategy resulted in a 60% revenue drop for Bithumb in 2023, leading to the discontinuation of the zero-fee campaign in February 2024.
Despite the decline in volumes for the Korean Won in early April, a significant rebound is anticipated with the approval of spot Bitcoin and Ether exchange-traded funds (ETFs) in Hong Kong. Hong Kong’s financial regulator has reportedly approved three spot Bitcoin ETFs, expected to list on the Hong Kong Stock Exchange in approximately two weeks.