South Korea Emerges as a Dark Horse in the Crypto Arena! Korean Won Surpasses US Dollar as the Preferred Currency for Q1 Cryptocurrency Trading

The Korean Won is now the leading currency in global cryptocurrency trading volumes, driven by the country's soaring speculative demand for risk tokens.

On Tuesday (April 16th), data from research firm Kaiko showed that during the first quarter of 2024, the Korean Won accounted for a cumulative trading volume of $456 billion on centralized cryptocurrency exchanges, surpassing the US dollar's $445 billion.

Source: Bloomberg

The growth in Won-denominated trades partly results from South Korea's ongoing fee wars. Smaller exchanges like Bithumb and Korbit have recently launched zero-fee trading promotions in an attempt to attract traders from Upbit, which dominates the local market with over 80% share of the spot trading volume.

Even in the high-risk cryptocurrency sector, South Korea stands out, with a local preference for smaller, often more volatile tokens—commonly known as altcoins—over major cryptocurrencies like Bitcoin and Ethereum. On average, transactions involving smaller tokens account for over 80% of all activity in South Korea.

In March this year, South Koreans flocked to Volatility Shares' 2x Bitcoin Strategy ETF (ticker: BITX), a fund designed to offer high returns at corresponding high risks.

The country's fervent demand for crypto assets has even made it an agenda item in recent parliamentary elections, with political rivals attempting to woo voters by promising to delay digital asset taxes or lift restrictions on investments in US Bitcoin ETFs.

Starting from July, South Korean regulators will introduce stricter consumer protection regulations known as the "Virtual Asset User Protection Law" in response to the catastrophic collapse of the ill-fated stablecoin TerraUSD, which had a market value of $40 billion, created by Do Kwon.

The "Virtual Asset User Protection Law" will impose stringent requirements on exchanges, including possible life sentences for criminal activities and rules concerning the segregation of user deposits and responsibilities in the event of hacks or system failures.