Key Takeaways:
- South Korean Won Surpasses US Dollar: In Q1 2024, the South Korean won became the most traded fiat currency in cryptocurrency, with over $456 billion in transactions, surpassing the US dollar by a narrow margin.
- Impact of Fee Wars: Intense competition and fee wars among South Korean crypto exchanges, notably zero-fee trading by Bithumb and Korbit, have reshaped market dynamics, significantly increasing trading activity.
- Long-Term Financial Challenges: Despite a surge in trading volumes due to aggressive pricing strategies, Bithumb faced substantial revenue declines, highlighting the financial sustainability challenges of zero-fee trading policies.
In the dynamic world of cryptocurrency trading, the South Korean won has emerged as the top fiat currency, surpassing the US dollar in the first quarter of 2024.
Recent data shows the won dominating with over $456 billion in transactions on centralized exchanges, slightly edging out the US dollar’s $455 billion.
The South Korean won is now the most traded currency against cryptoassets globally with speculative demand for risky tokens in the country surging https://t.co/cvo8WAGVaD
— Bloomberg Crypto (@crypto) April 16, 2024
This shift in trading volume is largely attributed to intense competition among South Korean crypto exchanges.
According to a report from the research firm Kaiko, a combination of improving economic conditions and a fierce “fee war” has significantly increased activity on Korean platforms, reaching peak levels not seen in over two years.
Korean won surpasses US dollar as most-traded currency for crypto in Q1 https://t.co/2XpDJdyJH7
— The Block (@TheBlock__) April 17, 2024
In stark contrast, the Euro lagged behind, accumulating only $59 billion in trading volume and securing the third spot for the same period.
The report also highlights the impact of competitive strategies implemented by local exchanges.
Upbit continues to lead the market, controlling more than 82% of the total market share within South Korea since 2021.
#SouthKorea Won Overtakes US Dollar as Top Currency in Global Crypto Trading for Q1 2024 #NewsBytes https://t.co/at2jFlCrDf
— Bitcoin.com News (@BTCTN) April 17, 2024
However, the landscape began to change with the recent cryptocurrency market uptick.
Competitors Bithumb and Korbit have aggressively pushed zero-fee trading, shaking up market dynamics.
While Korbit’s market share has remained under 1%, Bithumb saw its share triple following the zero-fee introduction in October 2023.
Despite the surge in trading volumes, Bithumb faced a severe 60% drop in annual revenues in 2023, leading to the termination of its zero-fee policy in early 2024.
𝗔𝘀𝗶𝗮 𝗪𝗶𝗹𝗹 𝗟𝗲𝗮𝗱 𝗧𝗵𝗲 𝗡𝗲𝘅𝘁 𝗕𝘂𝗹𝗹 𝗥𝘂𝗻
— Wise Advice (@wiseadvicesumit) April 17, 2024
Reasons👇
▶️ Korean Won overtakes US dollar in total #Crypto trading volume.
▶️ Hong Kong approves multiple #Bitcoin and #Ethereum spot ETFs.
▶️ Asia accounts for over 𝟳𝟬% of crypto exchange trading volume.
▶️… pic.twitter.com/2ZTX71J9vI
Such strategies, although temporarily beneficial in boosting volume, posed long-term financial sustainability challenges.
Adding to the regional dynamics, the anticipation of new cryptocurrency investment products such as spot Bitcoin and Ether ETFs in Hong Kong also plays a role.
With the Hong Kong financial regulator approving three such ETFs, expected to list within two weeks, further shifts in trading volumes are anticipated, potentially benefiting the Korean won.
Breaking: South Korean won (KRW) tops global crypto trading, overthrowing USD 👀
— MartyParty (@martypartymusic) April 16, 2024
As per Kaiko Report, Transactions involving the Korean #won on centralized cryptocurrency exchanges reached $456 billion in the first quarter of 2024. This figure slightly edged out the $445 billion… pic.twitter.com/vVkhpqYoig
As the landscape continues to evolve, the interactions between regulatory changes, market strategies, and economic conditions promise to keep the crypto trading arena vibrant and unpredictable.
About The Author
Victor Fawole, a seasoned Web3 content creator and social media influencer, excels in bringing the pulse of the crypto world to our readers.
With a keen eye for emerging trends and a talent for engaging storytelling, Victor’s articles offer a fresh perspective on the ever-evolving digital currency landscape.
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