Small and mid-sized cryptocurrency exchanges in Korea are taking a hit from the domestic stock market boom. Trading volumes at Coinone and Korbit, which had once expanded their market share to around 10%, have plummeted, shrinking their share back to about 1%.
According to cryptocurrency data platform CoinGecko, the combined 24-hour trading volume of Korea's top five cryptocurrency exchanges stood at approximately $2.39 billion (about 3.51 trillion won) as of 1:30 p.m. Tuesday. The figure is about $100 million lower than on Feb. 11, three months earlier. The decline is attributed to retail investor funds migrating to the stock market amid the continuing equity rally that began after KOSPI broke through the 5,000 mark in late January.
Small and mid-sized exchanges with relatively weaker user bases were hit particularly hard. Coinone's trading volume fell about 78%, from roughly $200 million in February to $43.46 million on the day. Korbit saw an even steeper decline, with trading volume plunging about 92% over the same period, from $245 million to $19.49 million.
As a result of the trading volume decline, the market shares of Coinone and Korbit, which had expanded to 8.1% and 9.8% respectively in February this year, have now shrunk back to around 1%. By contrast, Upbit's trading volume actually rose about 25% over the same period, while Bithumb's volume fell only about 4%, pushing the combined market share of the two exchanges above 97%. "As market liquidity shrinks, trading is increasingly concentrated at larger exchanges," an industry official said.
