In the first quarter of 2024, the South Korean won overtook cryptocurrencies as the most traded fiat currency globally.According to a study report released by Kaiko on April 15, the won accounted for approximately $456 billion in trading volume on centralized crypto exchanges, surpassing the $455 billion in U.S. dollar volume.
The research firm attributes the rising dominance of the won to the “fee war” between Korean crypto exchanges. The report noted:
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. In Q1 2024, the South Korean Won surpassed the US Dollar in terms of cumulative trade volume.”
Comparatively, trading pairs denominated in euros only generated a cumulative volume of $59 billion, ranking third for the first quarter of 2024.
Since 2021, Upbit has held a commanding 82% of the South Korean cryptocurrency market share as the top exchange in the region.Rival exchanges are now more competitive than ever, though, as both Korbit and Bithumb exchanges announced zero-fee campaigns in late 2023 as a result of the current bull run.In the months following the implementation of zero-fee policy trading in October 2023, Bithumb’s market share tripled, while Korbit’s market share stayed below 1%.However, Kaiko claims that Bithumb’s revenue fell significantly as a result of the aggressive zero-fee policy.
“Despite its aggressive zero-fee strategy and the resulting surge in trade volume, Bithumb’s annual revenue dropped by 60% in 2023. The significant decline in revenue may have prompted the exchange to discontinue its zero-fee campaign on Feb. 5, just five months after its launch.”
The research group also pointed out that early April saw a dip in Korean Won volumes, but they anticipated a big bounce once spot Bitcoin and Ether exchange-traded funds (ETFs) were approved in Hong Kong.Three spot Bitcoin ETFs have reportedly received approval from Hong Kong’s financial regulator, and they should float on the Hong Kong Stock Exchange in about two weeks.