After Surpassing the KOSPI Market... Cryptocurrency Trading Volume Plummets

Trading Volume Dropped to About 9 Trillion Won After Surpassing 44 Trillion Won Earlier This Month
Exchange Revenue Structure Dependent on Cryptocurrency Prices...Risk of Slump Possible

[Asia Economy Reporter Gong Byung-sun] The trading volume of cryptocurrency exchanges, which once surpassed the KOSPI market, has significantly decreased.

According to cryptocurrency market data relay site CoinMarketCap as of the 31st, the trading volume of the four major domestic cryptocurrency exchanges (Upbit, Bithumb, Korbit, Coinone) was approximately 8.9378 trillion KRW. This is about 66% of the KOSPI market trading volume (13.5333 trillion KRW) as of the 28th.

When Bitcoin was on the rise, the trading volume on cryptocurrency exchanges was explosive. On the 7th of last month, just before Bitcoin surpassed 80 million KRW, Upbit alone recorded a trading volume of 22 trillion KRW. On the same day, it alone exceeded the KOSPI market trading volume of 14.4902 trillion KRW. On the 7th, fueled by the rise of altcoins, the trading volume of the four major exchanges reached 44.9716 trillion KRW, about three times that of the KOSPI market.

However, as the soaring cryptocurrency prices underwent correction, the trading volume also decreased. As of 8:30 AM on that day, Bitcoin was priced at 42.96 million KRW, about 47.6% lower than its all-time high. Altcoins also performed poorly. According to Upbit, all altcoins except Ethereum Classic, ADA, Ontology Gas, and Steem Dollar declined over the past month. Dun Protocol and Swipe showed drops in the 60% range.

In particular, domestically developed cryptocurrencies, known as Kimchi coins, are underperforming. Due to their large volatility, with some rising over 100% in a single day, many cryptocurrency investors flocked to Kimchi coins, significantly increasing domestic exchange trading volumes. However, as prices plummeted, trading also deflated like a bubble. The representative Kimchi coin, MediBloc, dropped about 80% from its all-time high to 80.40 KRW on that day. Trading sharply declined along with the price crash. On April 1st, MediBloc's trading volume reached approximately 2.2271 trillion KRW but shrank to about 67.24 million KRW by the 28th of this month.

Concerns are also being raised that cryptocurrency exchanges could fall into stagnation. Due to the revenue structure's dependence on cryptocurrency prices, if Bitcoin falls further, trading volumes could sharply decrease. Coinbase, listed on NASDAQ, has also been criticized for having a vulnerable revenue structure due to cryptocurrency volatility since its listing. In fact, during the cryptocurrency market downturn in 2019, Dunamu, which operates Upbit, recorded sales of 140.2 billion KRW and net profit of 9.4 billion KRW. Last year, sales and net profit were 176.7 billion KRW and 46.4 billion KRW, respectively.

This content was produced with the assistance of AI translation services.