Is South Korea leading global crypto adoption in Q1 2024?

South Korea has positioned itself as the leader in global crypto adoption, according to a report by research firm Kaiko. Indeed, the South Korean won (KRW) overtook the US dollar (USD) in cumulative trading volume in the first quarter of 2024. This growing dominance is mainly attributed to the fee war between Korean crypto exchange platforms and the improving macroeconomic environment.

Korean won, the new benchmark currency for global crypto exchanges

South Korea has emerged as a major player in crypto adoption in recent years. The country is known for its favorable regulatory environment and technophile population, which has led to significant growth in crypto trading.

In the first quarter of 2024, South Korean won (KRW) has overtaken the US dollar (USD) in terms of volume according to a report by the research firm Kaiko.

The KRW represented over $456 billion in trading volume on centralized platforms, compared with $455 billion for the USD. This remarkable performance is the result of an improved macroeconomic environment and intense competition between Korean exchanges.

Upbit South Korea’s leading crypto exchange, dominates the market with a share of over 82% since 2021. However, its rivals Bithumb and Korbit have stepped up the competition by launching campaigns with no trading fees at the end of 2023.

Although Korbit’s market share remained below 1%, Bithumb’s market share tripled in the months following the introduction of its policy in October 2023.

Zero fees strategy drives trading volume growth

The aggressive zero-fee strategy adopted by Bithumb led to a sharp increase in trading volumes, but had a negative impact on the platform’s revenues.

According to Kaiko, Bithumb’s annual revenues fell by 60% in 2023, leading the exchange to discontinue its no-fee campaign in February 2024, just five months after its launch.

The South Korean won’s dominance of the crypto market in the first quarter of 2024 is testament to the growing adoption of these digital assets in South Korea. Despite the slowdown in KRW transaction volumes in early April noted in the report, the recent approval of Bitcoin and Ether spot ETFs in Hong Kong should have a positive influence on crypto market sentiment in this neighboring country, if not the entire Asia-Pacific region.