According to BlockBeats, on August 1st, trading volume in the South Korean virtual asset market continued to shrink, and the competitive landscape among the five major Korean won exchanges is changing. During the market downturn, funds are further concentrating on platforms with leading liquidity, while smaller exchanges are seeking breakthroughs through partnerships with securities companies, institutional market expansion, and business restructuring.
Data shows that in the first half of this year, the combined trading volume of South Korea's five major won-denominated exchanges (Upbit, Bithumb, Coinone, Korbit, and Gopax) was approximately US$366.58 billion, a year-on-year decrease of 54.6%. From July 1st to 27th, the combined trading volume of the five exchanges was approximately 17.34 trillion won, a 16.9% decrease compared to the same period last month. Upbit's trading volume was approximately 11.69 trillion won, a 10% decrease, but its market share rose from 62.3% to 67.4%. Bithumb's trading volume decreased to 4.71 trillion won, and its share fell from 30.7% to 27.1%, widening the gap between the two to 40.3 percentage points.
Market analysts believe that the decline in volatility of Bitcoin and altcoins is a significant reason for the shrinking trading volume. In the first half of this year, Bitcoin's average daily volatility was 1.25%, and the altcoin index volatility was 1.79%, both lower than the 4.67% of the South Korean KOSPI index. Against the backdrop of shrinking market liquidity, investor willingness to trade has decreased, putting greater pressure on exchanges that rely solely on transaction fee revenue.
Meanwhile, mid-to-lower-tier exchanges are beginning to seek partnerships with traditional financial institutions. Industry insiders believe that the changes in the South Korean exchange industry are similar to global trends. Coinbase, an American exchange, has recently faced pressure on trading revenue, but is reducing its reliance on transaction fees through subscription services, custody, and other non-trading businesses. The market is shifting from simple competition based on trading volume to competition based on financial ecosystems, institutional services, and asset infrastructure. (NexBlock)