At a time when digital currencies are surging, Bitcoin has always been the focus of attention. However, recent data shows that the trading volume of South Korea's two major exchanges has dropped by nearly 70%, raising questions about South Koreans' attitude towards Bitcoin. What exactly caused this huge change? This article will delve into this issue and reveal the complex factors behind it.

As an important market for digital currency transactions, South Korea's attitude towards Bitcoin has always attracted much attention. However, recent data shows that the trading volume of South Korea's two major exchanges has dropped by nearly 70%, which is a surprising number. This huge change has aroused people's interest in South Koreans' interest in Bitcoin. What exactly caused this change in attitude? Next, we will dig deeper into this issue and reveal the inside story.

 The uniqueness of the Korean market has caused a decline in Bitcoin trading volume

South Korea has always been a hot spot in the digital currency market, and its unique market characteristics have affected the performance of Bitcoin to a certain extent. South Koreans are well-known for their enthusiasm for investment and their acceptance of new things. However, recent data show that the Bitcoin trading volume of South Korea's two major exchanges has declined significantly. What are the reasons behind this phenomenon?

First of all, South Korea's financial regulatory environment has always attracted much attention. In recent years, the Korean government has tightened its supervision of the digital currency market, which has shaken investors' confidence in digital currencies to a certain extent. Especially when the price of virtual currencies such as Bitcoin fluctuates greatly, investors are more cautious and choose to temporarily withdraw from the market to wait and see, which directly leads to a decline in trading volume.

Secondly, Korean society has an increasing negative view of virtual currency speculation. Although the digital currency market has brought certain economic benefits, it is also accompanied by some risks and problems, such as money laundering and illegal transactions. The frequent exposure of these negative news has made the public begin to be more cautious about digital currencies, which has also directly affected the performance of Bitcoin in the Korean market.

 Exchange policy adjustments have caused investors to doubt

In addition to external environmental factors, policy adjustments by the two major exchanges in South Korea have also become one of the important reasons affecting Bitcoin trading volume. Recently, the two exchanges have successively announced a series of policy adjustments, such as increasing transaction fees and limiting trading leverage. These measures have affected investors' trading decisions to a certain extent.

In the digital currency market, policy adjustments by exchanges often directly affect investors' interests and operating methods. Especially in the case of large price fluctuations, changes in exchange policies may make investors feel uneasy and doubtful, and thus choose to reduce trading frequency or temporarily withdraw from the market. This is also one of the important reasons for the decline in trading volume.

 Future Outlook of the Korean Bitcoin Market

Although the Korean Bitcoin market has declined to a certain extent, it does not mean that Koreans have lost interest in Bitcoin. On the contrary, this adjustment and change may make the market healthier and more stable. In the future, with the gradual clarification of regulatory policies and the gradual improvement of the market environment, the Korean Bitcoin market is expected to usher in new development opportunities.

In general, Koreans' attitude towards Bitcoin has indeed changed to a certain extent, but this does not mean that they have completely given up on this digital currency. On the contrary, this adjustment and change may make the market more rational and healthy, laying a more solid foundation for future development. I hope that the Korean Bitcoin market will usher in more stable and sustainable growth in the future.

By deeply analyzing the current situation and future prospects of the Korean Bitcoin market, we can better understand the various factors behind it, so as to better grasp the trend and development direction of the market. I hope that the Korean Bitcoin market will usher in a new prosperity in the future and make greater contributions to the development of the digital currency market.

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Note: The above exchange logo is the official website registration link, and the text is the APP download link.

UPbit and Bithumb, the two largest crypto exchanges in South Korea by daily trading volume, have seen their trading volumes fall by 70% and 63%, respectively, since 2018.

According to an electronic bulletin from the Financial Supervisory Service (FSS) of South Korea, the annual profit of UPbit's parent company Dunamu fell by 93% year-on-year to $7.4 million.

The sharp drop in revenue for both companies is mainly due to the significant decline in demand for cryptocurrencies in the local crypto market over the past 24 months.

South Korea's cryptocurrency trading volume has fallen sharply

At its peak in 2017 and 2018, Bithumb processed about 1.2 million BTC in transactions per month, equivalent to $7.2 billion.

However, at the peak of price volatility in 2019 and 2020, Bithumb processed about 300,000 BTC in transactions. This indicates that its monthly Bitcoin trading volume has fallen by 75% from 2017 to 2018.

Similarly, UPbit's monthly Bitcoin trading volume has also fallen from 1.35 million BTC in 2017 to around 250,000 BTC in 2020. UPbit has averaged 200,000 BTC in monthly trading volume over the past two years.

Since late 2017, the price of Bitcoin has struggled toward its all-time high of $20,000, while all major exchanges in the country, including Korbit, Coinone and Gopax, have seen volumes fall by 60-80%.

(Average monthly BTC trading volume on UPbit since late 2017)

The sharp drop in revenues for South Korea’s top crypto exchanges follows a two-year growth stagnation in the local market, with UPbit and Bithumb facing high-profile legal cases.

In December 2019, the country’s National Tax Service charged Bithumb $67 million in taxes for serving overseas users. UPbit was accused of faking trading volumes, which the company strongly denied.

Both exchanges have also faced hacking attacks, with UPbit suffering a $50 million hack four months ago.

Can South Korea’s legislation save the crypto market?

The Special Financial Information Law, passed by South Korea’s National Assembly, is seen as a way to legalize the local crypto exchange market.

It remains uncertain whether the bill will be enough to revive interest in cryptocurrencies in South Korea in the short to medium term. Until the legislation is passed, local investors will face little hindrance in trading cryptocurrencies as the country’s top exchanges secure contracts with mainstream financial institutions.