Kaiko's recent findings attribute the Won's growing prominence to the competitive fee structures offered by South Korean crypto exchanges.

Trade volumes in the Korean crypto market have peaked in the first quarter, reaching a level unparalleled in over two years.

The report from Kaiko highlighted a significant milestone in early 2024, where the South Korean Won (KRW) surpassed the U.S. Dollar (USD) in the cumulative trade volume metric.

Evolution of Competition and Market Dynamics

The heightened trading activity reflects the intense competition among Korean exchanges and the shifting market landscape. While Upbit has traditionally held a major market share since 2021, recent times have seen intensified competition. Rivals like Bithumb and Korbit have made significant efforts to capture a greater market share, with Bithumb's zero-fee policy implementation in October 2023 proving particularly impactful.

Despite experiencing a substantial drop in annual revenue in 2023, Bithumb's market share surged following the adoption of their zero-fee strategy. In contrast, Korbit maintained a modest market share, hovering below 1% throughout 2024.

Strategies employed by exchanges like Bithumb contributed to the surge in trade volume, resulting in the Korean Won surpassing the U.S. Dollar in cumulative trade volume. However, this milestone was short-lived, as KRW volumes dwindled in early April. Kaiko anticipates a potential positive market shift across the Asia-Pacific region following Hong Kong's approval of spot BTC and ETH ETFs.

Regulatory Developments and Market Transformations

Elsewhere, Uniswap Labs' Wells notice disclosure on April 10th led to a sharp drop in the UNI token price and a significant spike in trading volumes, highlighting market volatility.

In the U.S., Coinbase expanded its market share, contrary to Binance.US's decline post an SEC lawsuit in June 2023. Binance.US saw a substantial decrease in its market share, dropping from over 30% last year to a mere 0.28% currently.

Recent data from Kaiko revealed a decline in the 90-day correlation between BTC and the Dollar Index (DXY), marking a new low of negative 0.24. The strengthening of the U.S. Dollar due to inflation uncertainties and Middle East tensions diverged from BTC's performance, as the cryptocurrency experienced a decline instead of drawing investor interest traditionally seen during such market movements.