Low Supply Volume
Bithumb—South Korea's largest cryptocurrency exchange—generated over $300 million in revenue from trading fees alone in 2017. Yet, it lists just 12 cryptocurrencies. Korbit, the country's third-largest exchange, offers even fewer options.
South Korean exchanges exercise extreme caution when listing new tokens. They meticulously analyze market demand due to the high premium and intense local interest in cryptocurrencies, contrasted with limited supply. This scarcity often forces investors to purchase assets at prices significantly above global averages.
Rigorous Listing Process
Before listing Qtum (QTUM) and Zcash (ZEC), Bithumb reportedly spent months conducting risk assessments to ensure these assets had long-term viability. Korean investors show selective interest—for instance, EOS’s daily trading volume on Bithumb surpasses the combined volume of Bitcoin, Bitcoin Cash, Litecoin, Dash, Monero, and Zcash. Thus, listing one high-demand token proves more profitable than adding multiple lower-volume assets.
👉 Discover how global exchanges compare in token offerings
Regulatory Barriers
South Korea imposes strict trading limitations, including:
- Ban on foreign investors using fiat trading pairs (enforced January 20, 2018).
- Historically, foreign traders faced quantity restrictions even before the ban.
These rules make exchanges hesitant to support cryptocurrencies with low demand but high supply. Unlike other markets where miners boost liquidity, South Korea lacks large-scale mining pools. With foreign investors and miners barred from introducing external supply, exchanges rely solely on local market sources.
Case Study: Miner Crackdown
In December 2017, Chinese miners were arrested for selling Bitcoin in South Korea. Prematurely listing tokens with high demand but inadequate supply risks:
- Failing to meet market needs.
- Creating legal and financial instability for exchanges and investors.
UpBit’s Strategic Edge
UpBit capitalized on the scarcity of listed tokens to become South Korea’s second-largest exchange within months of launch. Operated by Dunamu (a subsidiary of Kakao), UpBit’s partnership with Bittrex allows it to offer 100+ cryptocurrencies—a unique advantage in Korea’s restricted market.
Key Factors Behind UpBit’s Success:
- Diverse Portfolio: Only platform with 100+ tokens.
- Corporate Backing: Supported by Kakao’s ecosystem (KakaoTalk, KakaoPay).
- Global Liquidity: Access to Bittrex’s liquidity pool.
👉 Explore UpBit’s token diversity here
FAQs
Q: Why don’t Korean exchanges list more cryptocurrencies?
A: Strict regulations, limited local supply, and cautious risk management lead exchanges to prioritize quality over quantity.
Q: How does UpBit offer more tokens than competitors?
A: Its partnership with Bittrex enables access to international liquidity, bypassing local supply constraints.
Q: Can foreign investors trade on Korean exchanges?
A: No—fiat trading is restricted to local investors only, per 2018 regulations.
Conclusion
South Korea’s crypto market thrives on high demand but is constrained by low supply and rigorous oversight. Exchanges like Bithumb prioritize assets with proven demand, while UpBit leverages global partnerships to diversify offerings. For investors, understanding these dynamics is key to navigating Korea’s unique crypto landscape.
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