Upbit's Trading Volume Collapses…'Crisis Theory' Spreads Amid Expanded New Listings

▲ Has Upbit's heyday ended?/AI generated image ©

Analysis suggests that Upbit, which once saw tens of trillions of won in daily transactions, is seeking a breakthrough with a 'listing drive' amid a sharp decline in trading volume and regulatory pressure. Although it maintains its position as the number one exchange in Korea, evaluations are emerging in the market that “Upbit's growth formula has begun to falter.”

According to industry sources on the 14th, Upbit's trading volume has been on a clear downward cycle since the cryptocurrency super boom in 2021. At that time, when Bitcoin (BTC) and altcoins were in a frenzy, Upbit absorbed most of the domestic market transactions, effectively establishing a monopoly. However, trading volume plummeted after global tightening and the Terra-Luna incident in 2022, briefly recovered in 2024 with expectations for a US Bitcoin spot ETF, and then entered a cooling phase again. Recently, analysis shows that there are more days where the daily trading value remains at around $1 billion to $4 billion.

In particular, evaluations suggest that changes in market structure are burdening Upbit. In the past, the domestic retail investor-centric market saw a repeated pattern of 'Kimchi premium' and short-term altcoin surges, but recently, global capital is shifting to US Bitcoin spot ETFs and institutional-centric markets. Domestic investors are also showing a trend of moving some capital to US stocks and overseas exchanges based on stablecoins rather than short-term trading. In fact, Upbit's trading volume also repeatedly shows a pattern of temporarily exploding only during periods of surging transactions for specific altcoins or XRP (Ripple).

Analysis suggests that Upbit's recent proactive stance in expanding new listings is not unrelated to this slowdown in trading volume. The market also raises the view that Upbit is returning to an 'altcoin liquidity hub' strategy, with repeated short-term surges and explosions in trading value immediately after new coin listings. In fact, some newly listed assets have ranked high in daily trading value, boosting the stagnant exchange atmosphere in the short term. Industry experts also comment that “Upbit is actively utilizing demand for new themed coins and memecoins to recover trading volume.”

Regulatory risk is also a burden for Upbit. Financial authorities have recently moved to strengthen best practices for virtual asset trading support and listing review standards, pressuring exchanges for transparency in their listing and delisting procedures. As volatile fluctuations of specific coins and volatility issues immediately after listing repeat, the demand for investor protection is also growing. Furthermore, the rapid reorganization of the US and European markets into institution-centric structures is relatively diminishing the influence of the domestic exchange-centric market, which is also cited as a concern for Upbit.

However, there is also a counterargument that it is difficult to immediately conclude that the crisis will lead to a slump, given that Upbit remains the absolute dominant player in the domestic market. Upbit still accounts for most of the Korean won transactions in the country, and its impact from new listings and liquidity concentration effects are overwhelming. Market forecasts also suggest that if US interest rate cuts and an altcoin bull market fully materialize again in the future, Upbit's trading volume could also recover rapidly. Ultimately, whether Upbit can create a new growth strategy suitable for the 'institutional era' is emerging as a key variable that will determine the future landscape of the domestic cryptocurrency market.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*