Tectonic Rift Threatens Upbit’s Dominance
A major shift in the South Korean crypto exchange landscape is causing tensions among domestic platforms, with Upbit facing a significant decline in market share. According to Daehan Kyungjae, Upbit’s market share has plummeted from 93% in June to under 62% in December. Meanwhile, its biggest rival, Bithumb, has seen a substantial increase in market share, rising from under 6% to almost 36.5% during the same period. Other major rivals of Upbit, including Korbit, Coinone, and Gopax, have also experienced modest gains. All five exchanges are members of the Digital Asset Exchange Association (DAXA), which holds operating permits for fiat won trading.
Rivals Offering Competitive Services
In an effort to stay competitive, Upbit’s rivals have introduced various services aimed at boosting their appeal. One such service is commission-free trading, which is currently only offered by Bithumb. Upbit’s decision to charge commissions on crypto trades has been seen as a desperate move since commission fees are a significant revenue source for domestic exchanges. Bithumb initially offered commission-free trading on selected coins and later extended the offer to its entire portfolio. This move has put further pressure on Upbit as it struggles to maintain its dominance.
Controversy Surrounding WEMIX
The altcoin WEMIX has become a point of contention among DAXA members. While Bithumb and other DAXA members have announced plans to re-list WEMIX after previously delisting it, Upbit has not made any such announcement. This decision has revived old conflicts, as WEMIX was developed by WeMade, a major gaming firm in South Korea. The delisting of WEMIX was viewed as a power play by Upbit, causing tensions within the industry.
Commission-Free Trading Faces Opposition
Bithumb’s commission-free trading initiative may face challenges from pressure groups. A newly formed “crypto investors group” has reported Bithumb’s free transaction fee policy to the Fair Trade Commission, claiming that it aims to exclude rival businesses from the market. Despite this tension, DAXA recently announced its cooperation with regulators to block unregistered crypto trading platforms. Bithumb’s recent support for the stablecoin USDT and Coinone’s listing of the Tether-run token also demonstrate efforts to gain a larger market share.
Hot Take: Upbit’s Decline and Changing Dynamics
The South Korean crypto exchange landscape is undergoing significant changes as Upbit’s dominance wanes. The decline in Upbit’s market share has opened up opportunities for its rivals, particularly Bithumb, which has seen substantial growth. Upbit’s decision to charge commissions on trades while its competitors offer commission-free trading has been seen as a desperate move. Additionally, controversies surrounding the delisting and potential relisting of WEMIX have further strained relations among DAXA members. It remains to be seen how these developments will shape the future of South Korean crypto exchanges, but it is clear that competition is intensifying and dynamics are shifting in the industry.
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