South Korean Won Surpasses US Dollar as Most Traded Currency in Crypto Market in Q1 2024
Summary:
In the first quarter of 2024, the South Korean Won overtook the US dollar as the most traded traditional currency on crypto exchanges, with over $456 billion in trade volume. The increased dominance of the won is attributed to the ongoing fee war among Korean crypto exchanges, predominantly Upbit, Bithumb, and Korbit. Despite a sharp decline in Bithumb's revenue due to its zero-fee policy, the won's trade volume is expected to rebound following the approval of Bitcoin and Ether exchange-traded funds in Hong Kong.
In the first quarter of 2024, the South Korean won emerges as the most popular traditional currency used for cryptocurrency transactions worldwide. Centralized cryptocurrency exchanges registered over $456 billion worth of transactions conducted in the won, toppling the U.S. dollar, which came in a close second with $455 billion. This is according to a research report from Kaiko dated April 15.
Kaiko suggests that the growing significance of the won in crypto transactions is due to the competitive battle taking place among Korean crypto exchanges to eliminate fees. The report stated, "In early March, trading volume on Korean markets reached a record high unseen for more than two years thanks to improving macroeconomic circumstances and intense competition among Korean exchanges. Thus, in Q1 2024, the South Korean Won outperformed the US Dollar in cumulative trade volume."
By comparison, the Euro only had $59 billion in trading volume, landing it the third spot in Q1 2024.
The dispute over fees among the South Korean exchanges has intensified, yet Upbit continues to be the reigning exchange. Dominating more than 82% of the South Korean cryptocurrency market since 2021.
However, the recent surge in the market has heated up the rivalry among exchanges. Both Bithumb and Korbit exchanges capitalized on this trend, initiating zero-fee campaigns towards the end of 2023.
Despite Korbit's market share staying below 1%, Bithumb saw its market share triple in the months following its no-fee trading policy debut in October 2023. Nonetheless, this aggressive strategy resulted in a substantial revenue decline for Bithumb as noted by Kaiko, stating, "Despite the significant increase in trading volume resulting from the zero-fee strategy, Bithumb experienced a 60% drop in annual revenue in 2023. This dramatic fall in income may have led the exchange to abandon the no-fee campaign on February 5, barely five months after its initiation."
According to Kaiko, trading volumes for the Korean Won experienced a slump in early April. However, it anticipates a significant bounce back following the approval of spot Bitcoin and Ether exchange-traded funds (ETFs) in Hong Kong. Reportedly, the Hong Kong financial regulator has given the green light to three spot Bitcoin ETFs. These ETFs are slated to be listed on the Hong Kong Stock Exchange in roughly a fortnight.
Published At
4/16/2024 3:56:18 PM
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