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Bithumb rises to challenge Upbit’s dominance in South Korea’s crypto market

TL;DR

  • Bithumb is challenging Upbit’s long-standing dominance in South Korea’s cryptocurrency market, achieving a temporary market share peak of 72%.
  • The exchange plans to enter the KOSDAQ by late 2025, potentially becoming the first publicly traded digital asset company in South Korea.
  • Despite its growth, Bithumb faces challenges, including a failed deal with KB Kookmin Bank for real-name account transactions, which is essential for compliance and expansion.

Bithumb is increasingly challenging Upbit’s long-held market dominance. This development emerges amid a surge in crypto trading activity nationwide, particularly with Bitcoin’s rising popularity. Bithumb’s aggressive strategies and recent achievements have sparked a heated rivalry with Upbit, signaling a potential change in market leadership.

Market dynamics and competitive strategies

Recent data highlights a significant uptick in crypto trading within South Korea, with Bithumb and Upbit at the forefront of this wave. In the first week of January 2024, both exchanges saw their trading volumes hit peak levels, underscoring the intensifying competition between them. A report from Kaiko reveals that Bithumb momentarily achieved a market share high of 72% in early February, surpassing Upbit. This was a notable increase, especially considering Bithumb’s Bitcoin trading volume neared $3 billion in January, substantially outpacing Upbit’s.

Bithumb’s strategic move to eliminate transaction fees for all supported digital assets played a critical role in its temporary market share gain. However, this advantage was short-lived as Upbit’s trading volumes soon recovered. Despite this, Bithumb’s efforts to consolidate its position in the domestic market have not gone unnoticed, with the exchange preparing for a significant milestone – its planned entry into the KOSDAQ by the latter part of 2025. If successful, Bithumb will become the first digital asset company to be publicly traded on the South Korean stock market, with Samsung Securities reportedly serving as a potential underwriter.

Challenges ahead for Bithumb

Despite Bithumb’s impressive strides in capturing market share, the exchange faces notable challenges in its expansion efforts. A significant setback emerged as Bithumb failed to secure a deal with KB Kookmin Bank for the establishment of real-name accounts, a critical component for trading in the Korean won. This development is particularly concerning as Bithumb’s existing contract with NH NongHyup Bank is approaching its expiry on March 24. The inability to comply with the Act on Reporting and Using Specified Financial Transaction Information, which mandates the use of real-name accounts for transactions, poses a risk to Bithumb’s ambition to attract more traders.

This regulatory hurdle underscores the complexities of operating within South Korea’s tightly regulated crypto market. As Bithumb navigates these challenges, its ability to innovate and adapt will be crucial in maintaining its growth trajectory and competitive edge against rivals like Upbit.

Undoubtedly, while Bithumb has made significant gains in challenging Upbit’s dominance, it also faces regulatory and operational challenges that could impact its future growth. As Bithumb prepares for its potential KOSDAQ listing and seeks solutions to its banking dilemma, let’s keep our fingers crossed and see how things unfold.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Damilola Lawrence

Damilola is a crypto enthusiast, content writer, and journalist. When he is not writing, he spends most of his time reading and keeping tabs on exciting projects in the blockchain space. He also studies the ramifications of Web3 and blockchain development to have a stake in the future economy.

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