South Korea’s leading cryptocurrency exchange, Upbit, experienced a dramatic swell in its 24-hour trading volumes at the start of March, hitting a peak before plunging down to $3.8 billion in early April. The exchange’s record-breaking day came on March 5th, when it saw around $15 billion in daily trades, marking the most substantial volume for the year.
Trading Surge Linked to Bitcoin’s Highs
This significant rise in trading activity on Upbit coincided with Bitcoin reaching a new high, with the cryptocurrency peaking at $69,200. Contributing to this spike were large investments into new Bitcoin spot exchange-traded funds (ETFs) in the US. Particularly noteworthy was the all-time high Bitcoin price on Upbit, which surged to 96,734,000 South Korean won, or $72,504 – a figure exceeding international levels.
This phenomenon, known as the ‘Kimchi Premium’, highlights the occasional higher prices of Bitcoin on South Korean exchanges compared to global averages. However, this heightened trading activity was short-lived, with volumes dipping to $2.6 billion by the end of March.
Dynamics of Upbit’s Market Performance
As reported by CoinGecko, Upbit’s trading volume on April 1st steadied at $3.8 billion. Upbit’s parent company, Dunamu, witnessed an 81% drop in net profit in 2023, recording earnings of $23 million in late November, a stark contrast to the $123 million from the previous year.
This downturn was attributed to a sluggish investment climate and depreciating crypto asset values. Despite the profit slump, Dunamu remains committed to expanding Upbit, obtaining a Major Payment Institution license from Singapore’s central bank in January, which allows the provision of crypto and fiat services in Singapore.
Inferences from this article
- Upbit’s trading volume is subject to significant fluctuations influenced by market trends and crypto asset prices.
- The ‘Kimchi Premium’ can lead to variations in Bitcoin pricing on South Korean exchanges versus international markets.
- Despite economic challenges, Upbit’s expansion efforts continue, as evidenced by its new license in Singapore.
While Upbit’s daily trading volumes have seen ups and downs, these movements reflect broader market trends and the exchange’s strategic responses to the changing economic landscape.
