In the first quarter of 2024, the South Korean won has emerged as the most widely traded fiat currency against cryptocurrencies globally. According to a research report by Kaiko on April 15, the won accounted for a trading volume of over $456 billion on centralized crypto exchanges, surpassing the $455 billion volume in U.S. dollars.
The dominance of the won can be attributed to the ongoing “fee war” among Korean crypto exchanges, as highlighted in the report. In comparison, Euro-denominated trading pairs only managed to accumulate $59 billion worth of cumulative volume, placing them in third position for the first quarter of 2024.
Upbit, the leading crypto exchange in the region, has held a significant market share of over 82% in South Korea since 2021. However, the recent surge in the crypto market has intensified competition among rival exchanges. Bithumb and Korbit, in particular, launched zero-fee campaigns in late 2023, resulting in increased market share for Bithumb and a drop in revenue due to the aggressive zero-fee policy.
Although Korbit’s market share remained below 1%, Bithumb’s market share tripled in the months following the introduction of zero-fee policy trading in October 2023. Despite this success, Bithumb experienced a significant decrease in revenue, according to Kaiko.
The research firm also mentioned that trading volumes for the Korean won declined in early April but are expected to rebound significantly with the approval of spot Bitcoin and Ether exchange-traded funds (ETFs) in Hong Kong. It has been reported that Hong Kong’s financial regulator has approved three spot Bitcoin ETFs, which are set to be listed on the Hong Kong Stock Exchange in approximately two weeks.
The emergence of the South Korean won as the most-traded fiat currency against cryptocurrencies reflects the growing influence of Korean crypto exchanges and their aggressive fee strategies. With the approval of Bitcoin and Ether ETFs in Hong Kong, the trading volumes for the won are likely to experience a significant boost in the near future.