Trading activity on South Korea's crypto exchanges has plunged more than 50%, forcing smaller platforms to pivot sharply to survive. Major players like Upbit now dominate over two-thirds of the market, while Coinone and Korbit lean heavily on financial partnerships. Meanwhile, Bithumb and Gopax are stuck in limbo with stalled deals and unpaid deposits.

Volume Declines Force Business Model Overhaul

The aggregated turnover on South Korea’s five leading won-based crypto exchanges Upbit, Bithumb, Coinone, Korbit, and Gopax dropped 54.6% in the first half of the year compared to last year, totaling about $366.58 billion. Daily trading volume from July 1 to 27 fell further by nearly 17%, hitting approximately 17.3 trillion won ($11.7 billion). This slump reflects a broader market contraction against local equities, with crypto’s share of daily turnover on the KOSPI market shrinking from 11% in January to just under 2% in May.

Smaller exchanges are actively forging partnerships with banks and brokerages and targeting institutional clients to compensate for the lack of retail trading. Regulatory challenges also push firms to focus on compliance and clearing outstanding issues. This strategic shift is essential as crypto volumes remain a fraction of what they were during the November 2024 peak, when optimistic traders expected lighter regulation under a potential Trump administration.

Market Moves and Sentiment

Bitcoin’s daily price swings have notably contracted to about 1.25% in the first half of the year, with altcoins slightly more volatile at 1.79%. Both are muted compared to the 4.67% average move in the KOSPI index, signaling dampened enthusiasm and lower trading activity. Upbit’s growing market share (67.4%) contrasts sharply with Bithumb and Gopax’s struggles, highlighting a market polarizing around fewer but stronger players.

As volumes falter and competition tightens, survival hinges on adapting business models and regulatory hygiene. This reshaping could redefine South Korea’s crypto landscape for years to come.

This material is for informational purposes and does not constitute financial advice.