85% of funds are concentrated in altcoins, and structural barriers create a unique new product bonus for the Korean won.

Written by: Heechang Kang

Translated by: Luffy, Foresight News

The South Korean crypto market is completely opposite to the global mainstream pattern.

The above image visually shows this abnormal market characteristic. In the last statistical period, long-tail small coins accounted for 58% of trading volume on Upbit and 52% on Bithumb; Bitcoin only accounted for 9% of transactions in the South Korean market. In comparison, Bitcoin's trading volume proportions on Binance and Coinbase were 23% and 47%, respectively. The spot market for the Korean won ranks second globally, with an average weekly transaction volume of approximately 26 billion dollars, accounting for 30% of the global spot total. Such a massive market has developed a preference for funds that is completely opposite to the global trend, which is by no means an accidental phenomenon of a niche market.

As early as the first quarter of 2024, the transaction volume of Korean won trading pairs reached 456 billion dollars in a single quarter, briefly surpassing the US dollar to become the top fiat currency in the crypto market. However, only 15% of this large capital flowed into Bitcoin and Ethereum, while the remaining 85% all poured into altcoins and newly listed tokens, creating a unique liquidity bonus in the Korean won market.

The strong long-tail demand directly spurred the rise of two major local exchanges. Upbit leveraged this wave to rank among the top five globally in terms of transaction volume, occupying over 80% of the South Korean market share, which later data fell to 72%; Upbit and Bithumb together monopolized nearly 96% of South Korea's trading volume.

The dual oligopoly enjoys a massive retail investor base. By early 2025, the number of registered users on exchanges surpassed 16.2 million, exceeding the 14.5 million stockholders in the South Korean stock market. Regulatory data shows that by the end of 2024, the number of verified traders reached 9.7 million, a six-month increase of 25%, with the scale of users' crypto assets held doubling to 77.5 billion dollars. The age distribution of investors is concentrated in the 30s (29%) and 40s (27%); 66% of users hold amounts of less than 500,000 won. A large number of small, active retail investors are the core group for trading long-tail small coins.

85% of trading volume is concentrated in altcoins

Global mainstream exchanges focus on BTC and ETH as trading cores, while the South Korean market is completely inverted: 85% of local trading volume flows into altcoins, Bitcoin only 9%, and Ethereum 6%. This unique fund preference is due to four structural constraints that limit the legal investment channels for risky funds in South Korea:

• There is a lack of compliant derivatives. There are no legal crypto futures, options, or leveraged products in South Korea. The demand for overseas traders to profit through derivatives can only rely on the highly volatile spot altcoins locally, making small coins a "natural leverage tool" for retail investors.
• Capital controls isolate overseas institutions. Mandatory real-name domestic bank accounts and rules that only allow won deposits and withdrawals directly isolate overseas market makers and cross-market arbitrage teams. Market pricing is entirely dominated by local retail investors, lacking professional institutions to hedge emotions; once a trend forms, it tends to amplify.
• The exchange listing pool is narrow. Upbit only supports trading in won with about 324 listed coins; Binance and Bitget list over 700 coins. Local funds can only flow to fewer targets, and each newly listed token attracts far more financial attention than global platforms.
• A national retail investor market culture. There are almost no institutional participants in the market, the rapid spread of digital products, and hot trends disseminate quickly among the public. Funds tend to cluster around popular new coins simultaneously, creating a unified buying wave; the US market relies on ETFs and corporate funds to stabilize holdings of BTC and ETH, while South Korea has long lacked institutional buying.

New listing pump: a liquidity closed loop in a closed market

Every new coin listing on Upbit or Bithumb prompts a surge in prices. The trading volume of PRL surged 5500% within 24 hours of listing, SLX doubled in price, HYPER soared over 100%, AZTEC rose 82%, and SKR's trading volume surged 700%, with price up 62%. New listings have also become a competitive strategy for the two exchanges to vie for market share: in September 2025, Bithumb's share rose to 46%, and Upbit subsequently listed 7 new coins within 10 days as a counterattack.

Intraday speculation similarly forms a fixed pattern known as the "9 AM market." At 9 AM Korean Standard Time, a collection of unknown altcoins collectively surge, with retail investors betting on the next hot coin daily; the trigger point for price movement isn't industry news, but purely the unified trading behavior of retail investors.

Even when deposit and withdrawal channels are frozen, speculative enthusiasm remains undiminished. In November 2025, Upbit suffered a hacker attack and suspended deposits and withdrawals; however, retail funds continued to speculate on tokens like ORCA and RAY on the platform, a practice known as "net-style pumping," earning the platform $340,650 in transaction fees in a single day. In February 2026, ZKsync surged nearly 970% during a platform maintenance period, directly prompting regulatory investigations, again confirming the speculation closed loop of a closed market.

Capital controls that isolate overseas arbitrage capital are the core reason why pump trends can continue to rise, a hallmark phenomenon being "kimchi premium": the average maintained at 2%-3%, peaking at 10.88% in March 2024. However, market trends have dual aspects; by the end of 2025, the premium turned negative, and the short-term premium effect brought by new listings also noticeably weakened.

Fading heat: the lifecycle of new listing bonuses

The above image shows the pattern of fading enthusiasm for new listings. The liquidity of all tokens is highly concentrated in the early period after listing. The median liquidity of newly listed tokens on Upbit loses most of it within 10-15 weeks after listing; however, it does not drop to zero completely, forming a stable bottom liquidity. When a token has been listed for 51 weeks, the median liquidity of surviving tokens stabilizes at 11.3 million dollars per week, second only to Binance's 25.6 million dollars, and about five times that of Coinbase (2.3 million) and Bithumb (2.2 million).

However, the retention performance of tokens is not optimistic. After 51 weeks of listing, only 42.7% of tokens on Upbit and 40.5% on Bithumb can maintain trading volumes of over 10% of their peak after listing; for Binance, this ratio is 43.6%, and for Coinbase, it is as high as 63.8%. Coinbase's initial heat is lower and trend is steadier, making it easier to maintain the 10% liquidity threshold; Korean tokens experience huge trading volumes upon listing, and even if only 10% remains, the absolute amount is still considerable. Overall, nearly 60% of new tokens in South Korea lose most of their initial capital within a year.

Objectively speaking, the South Korean market has a deep yet selective memory. In the first few months after a new listing, dramatic eliminations occur, and only a few targets can settle long-term large liquidity. New listings for the Korean won are not a source of permanent stable flow, but rather a year-long "screening assessment," ultimately allowing only a few tokens to obtain stable liquidity in the millions.