DeSpread Analyzes South Korea's Centralized Exchanges: The Kingdom of Altcoin Trading with 6 Million Crypto Investors

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South Korea has emerged as one of the most dynamic cryptocurrency markets in the world, with a highly engaged retail investor base and a unique digital asset ecosystem. A recent in-depth report by Web3 advisory firm DeSpread sheds light on the inner workings of South Korea’s centralized exchanges (CEXs), revealing key trends in trading behavior, market dominance, and regional peculiarities that set it apart from global counterparts.

With an estimated 6 million crypto investors—over 10% of the national population—the country's appetite for digital assets continues to grow. Most of these investors operate primarily through centralized platforms, making CEXs the epicenter of South Korea’s blockchain economy.

Rising Global Influence: Trading Volume Trends in Korean Exchanges

Although global CEX trading volumes peaked in March and have since seen a slight decline, South Korean exchanges have demonstrated resilience and even growth. After a dip following their February highs, platforms like Upbit reversed course and began outpacing major international players, including Binance, in certain metrics.

This resurgence highlights the increasing global significance of Korean exchanges, which now command a growing share of worldwide trading activity. Their ability to maintain strong user engagement—even during broader market corrections—reflects deep-rooted retail participation and localized market dynamics that insulate them from global volatility to some extent.

👉 Discover how global traders are adapting to regional exchange trends.

Market Dominance: Upbit’s 80% Grip and Ripple’s Unexpected Impact

The South Korean exchange landscape is highly concentrated, with Upbit controlling approximately 80% of the market share. As the undisputed leader, Upbit sets the tone for trading behavior, listing standards, and investor sentiment across the nation.

Following Upbit are Bithumb, Coinone, and Korbit, though their combined influence pales in comparison. Bithumb briefly gained traction with its zero-fee trading campaign, aiming to lure users away from Upbit. While this strategy initially boosted its volume and user acquisition, the effect was short-lived, underscoring the strength of Upbit’s ecosystem lock-in.

Interestingly, Korean exchanges show outsized sensitivity to news related to Ripple (XRP). Announcements involving Ripple Labs or regulatory developments often trigger immediate spikes in trading volume across Upbit and Bithumb, demonstrating how specific asset narratives can dominate local markets regardless of broader crypto trends.

Investor Behavior: Why Altcoins Rule on Upbit

One of the most striking findings from the DeSpread report is the overwhelming preference among Korean investors for altcoins—lesser-known cryptocurrencies beyond Bitcoin and Ethereum.

Unlike U.S.-based exchanges such as Coinbase, where institutional demand drives volume in BTC and ETH, Upbit’s trading activity is fueled almost entirely by retail traders chasing altcoin opportunities. This makes South Korea a true “kingdom” of altcoin speculation.

Popular tokens among Korean investors include:

These assets often see disproportionate trading volumes on Upbit compared to global averages—even when they’re relatively inactive elsewhere. Some coins maintain consistent interest regardless of international price movements, indicating a strong domestic following.

This localized demand creates what’s known as the "Kimchi premium"—a phenomenon where certain cryptocurrencies trade at higher prices in South Korea due to restricted capital flows and high local demand.

Deposit & Withdrawal Patterns: Tron Dominates for Speed and Low Fees

When moving funds, Upbit users overwhelmingly prefer the Tron (TRX) network for deposits and withdrawals. The choice is driven by two key factors:

This preference reveals an important insight: most Korean investors use blockchain networks not for decentralized applications (dApps), but as efficient rails for transferring value between exchanges. Their interaction with Web3 is largely transactional rather than experiential.

Furthermore, changes in deposit and withdrawal policies on Korean exchanges can significantly impact both price action and arbitrage opportunities with overseas platforms. When withdrawals are restricted or networks go offline, price discrepancies widen—creating short-term trading windows for savvy cross-exchange participants.

👉 Learn how network choice affects your trading efficiency.

The “Koreanness” of Korean Crypto: Localized Trends and Isolated Markets

South Korea’s crypto market operates with a degree of isolation due to regulatory constraints, banking restrictions, and cultural preferences. As a result, certain coins—often dubbed "Korean altcoins" or "泡菜幣 (Kimchi coins)"—thrive locally despite limited global traction.

These include projects with:

Even if global markets ignore these tokens, they can experience massive rallies on Upbit due to coordinated retail buying, social media hype, or celebrity endorsements within Korea’s tight-knit investment communities.

This divergence means that global traders often overlook significant opportunities—or risks—originating in the Korean market. Understanding local sentiment, exchange-specific listing schedules, and withdrawal policies becomes crucial for anyone looking to navigate this ecosystem effectively.

Frequently Asked Questions (FAQ)

Why do Korean investors favor altcoins over Bitcoin?

Korean retail investors are highly speculative and seek high-growth opportunities. With Bitcoin seen as mature and less volatile, many turn to altcoins for greater upside potential. Cultural factors, social trading trends, and influencer-led campaigns also amplify interest in smaller-cap tokens.

What is the Kimchi premium?

The Kimchi premium refers to the price difference of certain cryptocurrencies in South Korea compared to global markets. Due to capital controls and high local demand, digital assets often trade at a premium on Korean exchanges.

How does Upbit differ from Coinbase?

Upbit caters primarily to retail traders who focus on altcoins and short-term speculation. In contrast, Coinbase serves more institutional and long-term investors, with BTC and ETH dominating its volume. The user base, product design, and market behavior reflect these fundamental differences.

Can foreign investors access Upbit?

Direct access for foreigners is limited due to strict KYC requirements tied to Korean bank accounts. However, some international users leverage third-party services or partner exchanges to gain indirect exposure to Upbit-listed assets.

Why is Tron so popular for transfers in Korea?

Tron offers near-instant transactions with negligible fees, making it ideal for frequent deposits and withdrawals between exchanges. Its reliability and cost-efficiency have made it the preferred network among Korean traders.

Are there risks unique to investing via Korean exchanges?

Yes. Regulatory uncertainty, sudden policy changes on deposits/withdrawals, limited foreign access, and localized pump-and-dump schemes pose unique risks. Additionally, lack of transparency around some “Kimchi coins” increases the potential for losses.

👉 Stay ahead of regional market shifts with real-time data insights.

Conclusion: A Unique Ecosystem Shaping Global Crypto Trends

South Korea’s centralized exchange market is far more than a regional player—it’s a trendsetter in retail-driven altcoin trading. With 6 million active investors, a dominant homegrown platform in Upbit, and distinct behavioral patterns around deposit networks and token preferences, the Korean crypto scene offers valuable lessons for global participants.

Understanding this market means recognizing that crypto adoption isn’t uniform—it evolves differently based on culture, regulation, and infrastructure. For traders, developers, and analysts alike, monitoring Korean exchange dynamics provides early signals of emerging narratives and potential cross-border spillovers.

As the line between global and local markets continues to blur, those who grasp the nuances of ecosystems like South Korea’s will be best positioned to capitalize on the next wave of decentralized innovation.

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