Korean Won Surpasses US Dollar in Crypto Trading

South Korean Won has overtaken the United States Dollar (USD) in cryptocurrency trading volume.

Overtaking the United States Dollar (USD) in terms of trading volume against cryptocurrencies is the South Korean Won (KRW), which has surpassed the USD.

According to research published by the financial analytics company Kaiko, the total value of transactions involving the Korean Won that took place on centralized cryptocurrency exchanges in the first quarter of 2024 exceeded $456 billion.

By a very small margin, this surpasses the trade volume of the United States dollar, which reported statistics of approximately $455 billion. A competitive climate on the South Korean cryptocurrency exchanges, where a “fee war” has been established, has been attributed to the increase in trading volume that has been observed.

As a result of this race, Korean Won has risen to the top of the list of the world’s fiat currencies in the cryptocurrency market, leading to a significant increase in trading operations.

Fee Wars Fuel Korean Won Trading Surge

One of the factors contributing to the observed appreciation of Korean Won is the increasing competitiveness among South Korean exchanges. Upbit, Bithumb, and Korbit are among the major competitors in the sector that have resorted to aggressive strategies in order to attract traders.

One example of these strategies is the introduction of trading times that do not charge any fees. Furthermore, despite the fact that these tactics have resulted in a significant increase in the volume of trades, they have also had an impact on the cash flows of these platforms.

As an illustration, the annual returns of Bithumb dropped by 60% in 2023. This was a direct result of the company’s zero-fee policy, which was reversed shortly after the beginning of February 2024, after just five months of being in effect.

Market activity has increased to levels not seen in more than two years, suggesting that the fee wars are effective. This is despite the fact that there are financial troubles happening.

The trading volume reached its highest point at the beginning of March 2024, with the positive macroeconomic environment and intense market competitiveness playing a significant role in this achievement.

The dominance of the Korean won in cryptocurrency trading takes place at a time when the cryptocurrency market is going through a number of significant advances on a worldwide scale.

It is anticipated that the recent approval of three spot Bitcoin and Ethereum exchange-traded funds (ETFs) by the Hong Kong financial authority will have a beneficial impact on market sentiments in the Asia-Pacific area for stocks.

These exchange-traded funds (ETFs), scheduled to list on the Hong Kong Stock Exchange, may further stimulate trading activity involving the Won.

In addition, the cryptocurrency market continues to watch regulatory measures in the United States, and the Securities and Exchange Commission (SEC) observes companies like Uniswap Labs with a more conservative approach.

These types of regulatory actions have a tendency to have an effect on the market dynamics and the emotions of investors all over the world, and as a result, they may cause changes in the trading volumes of various fiat currency and cryptocurrency pairings.

As the second quarter of 2024 progresses, market observers will be paying close attention to the influence that regulatory developments have and how they interact with market dynamics.

The fact that the Korean Won is currently in the top spot in terms of the trading volume of cryptocurrencies is indicative of a larger trend toward diversity in the cryptocurrency market on a worldwide scale.

When it comes to traditional safe havens, such as the United States dollar, traders and investors are increasingly looking for alternatives to other fiat currencies.

These currencies provide competitive benefits, such as reduced costs or higher market liquidity, and they are becoming increasingly popular. A further factor that will be of critical importance is the growth of the fee war among South Korean exchanges.

Should these platforms be able to find a middle ground between expanding volume and maintaining profit, the Korean Won will continue to be the most popular currency in the cryptocurrency trading industry when compared to the United States Dollar.

With the industry maturing, the strategies that these exchanges prefer will become the template for other regions that would like to enhance their place in the bitcoin market. This is because these exchanges support particular techniques.