DeSpread analyzes Korean centralized exchanges: the kingdom of altcoin trading, with a population of six million traders

Web 3 consulting firm DeSpread recently released a report regarding centralized exchanges in South Korea, providing detailed insights into the behavior of both CEXs and investors. According to a report from the Korea Financial Intelligence Unit (KoFIU), it is projected that by the first half of 2023, the number of cryptocurrency investors in South Korea will reach approximately 6 million, accounting for over 10% of the country's total population. The majority of these investors are primarily active on centralized exchanges.

DeSpread Analysis of Korean Centralized Exchanges

Trading Volume Trends: Increasing International Standing

Since reaching its peak in March, the trading volume of Centralized Exchanges (CEX) has declined. After peaking in February, Korean exchanges saw a downward trend, but later showed an upward trend, even surpassing the growth of Binance. Korean exchanges hold a significant position in the international market, with their market share continuously increasing.

Upbit Dominance, Impact of Ripple-related News

Upbit dominates the Korean cryptocurrency exchange market with a market share of around 80%. Bithumb is the second largest exchange, while Coinone and Korbit have smaller market shares. Korean exchanges have significant reactions to news related to Ripple, leading to a surge in trading volume.

Bithumb Zero Fee Policy

Bithumb introduced a zero fee policy, initially increasing its market share, but the effect was short-lived.

Comparison of Overseas Competitors Coinbase and Upbit

Individual investors on Upbit show strong interest in small altcoins, while Coinbase's trading volume is mainly driven by institutional investors focusing more on Bitcoin (BTC) and Ethereum (ETH).

Characteristics of the Korean Market: Significant Impact of Deposit and Withdrawal Policies, Specific Small Altcoins Popular

Korean investors show notable interest in coins like Loom Network ($LOOM), eCash ($XEC), and Flow ($FLOW). Changes in deposit and withdrawal policies of Korean exchanges may affect prices and trading volume as they impact arbitrage activities on overseas exchanges. Some coins remain of continuous interest in the Korean market regardless of global trends.

Upbit Investor Analysis

Some cryptocurrencies, known as "kimchi coins," are mainly traded by Korean investors on Upbit. Compared to the global market, the trading volume of major coins like Bitcoin (BTC) and Ethereum (ETH) on Upbit is surprisingly lower.

Upbit Deposit and Withdrawal Network

Upbit users prefer the Tron network for deposits and withdrawals due to its low fees and fast transaction speeds. For Korean investors, the purpose of deposits and withdrawals seems more to transfer funds between exchanges rather than utilizing on-chain products.

For a more detailed analysis of Korean exchanges, please refer to the original report by DeSpread