In a new report by Kaiko Research, crypto exchanges in South Korea are at war in terms of fee competition. At the same time, exchanges are keen to make themselves popular by charging low fees.
Fee competition drives market dynamics
The report has mentioned that from 2021, the leading exchange in the South Korean market is Upbit. The crypto exchange has an average market share of 82%, which has been going on for the past three years. Contrarily, we cannot ignore the fact that competition has been cut-throat following the recent surge in digital currencies prices.
The current competition was driven by the arrival of the two major South Korean regulated platforms, Bithumb and Korbit, in the market in 2023. The platforms began offering their services at no cost, attracting many investors to the country.
South Korean Won surpasses US Dollar amid fee strategies
According to the report, While Korbit’s market share did not significantly increase, averaging less than 1% in 2024, Bithumb’s market share tripled in the months following the introduction of its zero-fee policy in October 2023.
“Overall, the improving macroeconomic environment and fierce competition among Korean exchanges has boosted trade volume on Korean markets which hit its highest level in more than two years in early March.”
Bithumb exchange revenue decreased by 60% in 2023, which may have pushed Bithumb to end its zero-fee campaign on February 5, eight months after its launch. One of the significant elements in the report was that in the first quarter of 2024, South Korean Won(KRW) made a surprising turn as it surpassed the United States Dollar (USD) in terms of cumulative trade volume following the zero-fee tactics used by the exchanges.
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