South Korean Won Overtakes US Dollar in Worldwide Cryptocurrency Transactions
A cryptocurrency USD began to trade off KRW, which now has more pairs than the USD. A report published by the financial analytics firm Kaiko disclosed that during the first quarter of 2024; transactions on centralized crypto exchanges showed the won as the market exceeded $456 billion. Thus, the first cryptocurrency knocks the American remittance system off the pedestal of leading the trading volume platform with an estimated $459 billion.
This uptrend in trading volume is considered to be a result of the high competition in the market of South Korean crypto exchanges where “the fee race” has been brought to light. This competition has led to a significant growth in the trading volume and Won has settled the top row on the list of the countries whose fiat currency is traded on the crypto market.
Fee Fights to Show Rise of Korean Won Trade
Big players in the market, like Upbit, Bithumb, and Korbit, have started to employ rampant strategies like free-zero trading periods to bring in financers/ traders.
Although those measures have yielded a substantial boost to the volume of trade, they, at the same time, are also believed to be the cause of the cash flow problems that these portals are facing. As another instance, Bithumb’s annual return in 2023 dropped by 60% which affected its net income. The reason for this was that the firm had to stop implementing its no-fee policy after just five months of work in early February 2024.
Notwithstanding the financial hurdles, the rate wars have been, consequently, successful and the volumes of market activity have increased to levels not seen for more than two years. As of early March 2024, the price reached the top with the participation of a better macroeconomic environment and market supply’s rivalry effect.
Global Context and Market Trends
In the context of the volatile crypto market with global advances, the Korean won cornerstones of crypto trading. The green signal from the Hong Kong financial regulator to three spot Bitcoin and Ether ETFs is likely to be a bullish factor for the market moods in the Asia Pacific region. Such ETFs listed on the Hong Kong Stock Exchange may additionally propel trading activity surrounding the Won.
Also, the cryptocurrency market is still at the mercy of the regulatory actions in the United States while the Securities and Exchange Commission’s watchful eye moves on the likes of Uniswap Labs. This type of regulatory decision influences the market nature and the investor’s sentiment globally and hence can lead to an alteration of trading volumes across different pairs of fiat and crypto.
Potential Outlook
The second quarter of 2024 comes with market observers’ keen watchful eye on how regulatory developments interact with the market forces. The leading position of the Korean Won in the trading volume of cryptocurrency provides evidence of diverse trend growth in the global crypto market. Traders and investors today prefer to seek out various alternatives beyond the traditional haven of the US dollar towards currencies that may have competitive edges like better pricing or market liquidity.
