South Korea crypto exchanges seek finance deals as volumes halve
South Korea crypto exchanges are “switching to survival mode” as the crypto winter deepens and trading volume collapses. Combined first-half turnover at Upbit, Bithumb, Coinone, Korbit and Gopax fell 54.6% YoY to about $366.58B, with total volume around 17.3T won and daily turnover averaging 597.8B won—only ~1.59% of the KOSPI’s daily average (down sharply from earlier in the year).
Liquidity is concentrating at the largest venues. Upbit’s market share rose to 67.4% even as its July turnover dropped 10% to ~11.7T won. Bithumb’s turnover fell 26.6% to ~4.7T won and its share slid to 27.1%, widening the gap between the top two. Upbit briefly boosted stablecoin activity via fee waivers for selected stablecoins, with USDT turnover peaking near 200.0B won on July 29.
To stabilize revenue, South Korea crypto exchanges are turning to banks and brokerages. Coinone added a stock-trading entry routed through Korea Investment & Securities after the firms bought stakes in May (Korea Investment & Securities and OKX Ventures each ~20%). Mirae Asset Consulting bought 97.15% of Korbit, which plans to relaunch as DigitalX and expand into stablecoins, tokenized securities and custody—aiming at institutional clients. However, Bithumb’s stalled talks reportedly foundered on deal terms and complex ownership and regulatory issues.
Gopax, with ~0.1% share, prioritized resolving its suspended deposit product “GoFi” (losses near 100B won post-FTX collapse in 2022). Regulators require full repayments before granting its VASP renewal.
Overall, South Korea crypto exchanges are restructuring around institutional and compliance-driven partnerships, while retail liquidity keeps fleeing to alternatives like stocks.
Bearish
The news is bearish because South Korea crypto exchanges are reporting a broad contraction in liquidity (turnover down 54.6% YoY) and are forced into “survival” strategies that prioritize capital preservation over market-making. When exchange volume shrinks and shares concentrate into the largest venues, price discovery quality often worsens for smaller altcoins, increasing volatility and widening spreads—conditions traders typically hedge for rather than chase.
That said, the finance-deal angle (banks/brokerages taking stakes; planned relaunches; stablecoin fee waivers) can offer limited short-term relief by stabilizing balance sheets and boosting specific products like USDT flows. Historically, similar “winter + consolidation” phases (e.g., exchanges/venues adapting during prior downturns) tend to reduce retail participation and delay broad upside until capital and policy tailwinds return. In the short term, any positive headlines about institutional tie-ups may trigger short-lived bounces, but the long-term trend remains constrained by weaker daily turnover and unresolved regulatory/repayment issues (notably GoFi and Bithumb’s complications).