Five major South Korean cryptocurrency exchanges recorded 597.8 billion won in daily average trading volume from the 1st to 21st of this month. This represents just 1.59% of the KOSPI securities market's 37.6687 trillion won daily average during the same period, according to CoinGecko data compiled on the 23rd. The sharp decline stems from prolonged market downturn conditions that have driven capital toward domestic stock markets and overseas crypto exchanges. South Korea's crypto market structure, where altcoins comprise over 90% of trading activity compared to 30-50% at major global exchanges, has amplified the trading drought during the current downturn phase.
Korean Crypto Exchanges Record 1.59% of KOSPI Trading Volume
The five exchanges tracked—Upbit, Bithumb, Coinone, Korbit, and Gopax—saw their combined market share relative to the KOSPI securities market decline sharply throughout the year. The ratio stood at 11.29% in January and rose slightly to 12.03% in February before dropping to 6.24% in March and 6.67% in April. A steep decline to 2.03% occurred in May, followed by a brief recovery to 6.93% in June before falling back to the 1% range this month.
Six trading days this month recorded ratios below 1%: the 3rd (0.92%), 5th (0.75%), 6th (0.95%), 9th (0.89%), 14th (0.8%), and 15th (0.99%). Of the ten total trading days this year where the ratio fell below 1%, more than half occurred during the current month.
In November 2024, immediately following Donald Trump's U.S. presidential election victory, domestic crypto exchange trading volumes surged to 21 trillion won on market expectations. However, volumes contracted to 3 trillion won in both January and February of this year, then further declined to 1 trillion won per month from March through May. Meanwhile, KOSPI trading volumes expanded from 27 trillion won in January to 50 trillion won in both May and June.
Bitcoin Price Remains 50% Below All-Time High
Bitcoin rose approximately 13% this month, climbing from the $58,500 range to the $66,300 range. However, this increase has not offset the previous month's 20.48% decline. Current prices remain roughly half the all-time high of $126,000 recorded last year.
A "money move" phenomenon emerged as domestic stock markets overheated around semiconductor stocks, with crypto investment capital shifting to equities.
Altcoin-Heavy Market Structure Amplifies Decline
Joo Ki-young, CEO of CryptoQuant, stated: "Overseas exchanges like Coinbase and Binance see Bitcoin and Ethereum trading account for 50-70% of volume, but in South Korea it's less than 10%. The unusually high proportion of altcoins in the domestic market structure appears to have accelerated capital outflows during the market downturn."
Regulatory Delays Limit Domestic Exchange Product Offerings
Domestic exchanges face structural limitations as global regulatory reform lags. International exchanges have expanded into perpetual futures markets and diversified into stocks and commodities, while Korean platforms remain restricted primarily to spot trading.
Park Sung-je, a researcher at Shinhan Investment Securities, explained: "Domestically, only spot trading is effectively available, but overseas, futures and leveraged trading are all possible, so capital is moving to overseas exchanges like Binance. Demand for trading through domestic exchanges is declining."
FAQ
What is the current trading volume ratio between Korean crypto exchanges and the KOSPI stock market?
From the 1st to 21st of this month, the five major Korean cryptocurrency exchanges recorded a daily average trading volume of 597.8 billion won, which represents 1.59% of the KOSPI securities market's daily average of 37.6687 trillion won during the same period, according to CoinGecko data compiled on the 23rd.
Why has trading volume declined so sharply on Korean crypto exchanges?
The decline stems from prolonged market downturn, with Bitcoin prices remaining roughly 50% below the all-time high of $126,000 despite a 13% increase this month. Additionally, capital has shifted to domestic stock markets and overseas crypto exchanges. South Korea's market structure, where altcoins comprise over 90% of trading compared to 30-50% at global exchanges, has amplified the outflows during the downturn.
How do Korean crypto exchanges differ from global platforms in terms of product offerings?
Domestic Korean exchanges are restricted primarily to spot trading, while global exchanges offer perpetual futures, leveraged trading, and diversified products including stocks and commodities. This regulatory limitation has contributed to capital migration toward overseas platforms where more trading options are available.
