Insights from an East Asian Giant

Current Landscape of South Korea’s Crypto Market

Market Size by Users (KRW-Based Market)

• The number of users in the KRW market increased by over 30% between late 2023 and late 2024.
• 6.4M users (2023 year-end)→7.75M users (June 2024)→with an estimated 8.5M users by the end of 2024.
• The user ratio between Upbit and Bithumb is approximately 2:1. Upbit MAU 4.55M: Bithumb MAU 2.45M

South Korea: The Largest Market in East Asia
According to Chainalysis, South Korea is the leading cryptocurrency market in East Asia, with approximately $130B in on-chain cryptocurrency transactions conducted between July 2023 and June 2024, outpacing the rest of the region.

User Asset Distribution
High Value Individual Investors
By the end of 2023, approximately 80,500 individuals held over $70K in cryptocurrency. This number is estimated to have exceeded 150,000 by the end of 2024.

Value of Crypto Assets Stored in Korean Exchanges

• 2023 Year-End: ~$38B
• 2024 Year-End: Estimated to exceed ~$82B

Calculation: Σ (quantity of cryptocurrency held by each operator × market price of the respective cryptocurrency)

High-Net-Worth Overseas Crypto Holdings
In 2023, large-scale Korean investors holding crypto assets abroad (as reported to the Korea Financial Intelligence Unit) accounted for approximately $89 billion of the market. This figure was projected to more than double by the end of 2024.

The reports focus solely on high-net-worth individuals and corporations with crypto holdings over $342K (₩500M), indicating that the total value would be substantially higher if smaller asset holders were included.

Details A total of 1,432 high-net-worth individuals and corporations reported their overseas crypto accounts, which amounted to about $89 billion.\

Breakdown:

• 73 Corporations: Total~$82B, averaging over $1.1B(including foundation held tokens) per organization
• 1,359 Individuals: Total~$7B, averaging over $5M per person

According to a report by KB Securities, the cryptocurrency ownership rate among South Korea's high-net-worth individuals (HNWIs) also increased from 4.3% to 7.3%.

South Korea’s Crypto Exchange Landscape Daily Trading Volume

• Increased from ~$4B/day to ~$6.8B/day
• KRW based market accounted for 99.87%, while BTC or USDT-based markets contributed only 0.13%

Number of Listed Assets

• Upbit: 225 cryptocurrencies
• Bithumb: 334 cryptocurrencies (more aggressive listing strategy compared to Upbit)

Exchange Performance

• Upbit: Estimated operating profit of ~$680;
• Could potentially exceed $1B when including asset revaluation gains
• Bithumb: Estimated operating profit of ~$170;
• Could potentially exceed $250M when accounting for asset revaluation gains

Top 5 Cryptocurrencies Favored by Korean Traders

With the exception of major tokens like Bitcoin, Ethereum, and Solana, this analysis spotlights cryptocurrencies with notably high activity among Korean traders compared to the global average. These findings are based on data collected from Korean exchanges and League of Traders.

Ripple XRP

• Widely used for its low transaction fees and liquidity, XRP remains a speculative favorite despite declining utility for cross-border transfers.

Sui

• Riding on the success of Aptos and the Solana-Sui rivalry narrative, SUI has gained significant traction in Korea.

UXLink

• Driven by active community support, KakaoTalk hype, and strong local promotions, UXL leads in trading volume on platforms with many Korean users.

Hedera

• Corporate backing from LG and Shinhan Bank, along with media exposure and price volatility, has boosted HBAR’s popularity.

Ethereum Classic

• ETC benefits from historical support during its hard fork and consistent favor in Korean user surveys.

South Korea’s Cryptocurrency Taxation Policies

• A proposed legislation seeks to impose a 22% tax (inclusive of local taxes) on investment income exceeding approximately $1,700(₩2.5M) in cryptocurrency. This differs significantly from the ~$34K(₩50M) deduction allowed for other asset classes, sparking backlash from investors
• In response, the implementation of the taxation policy has been postponed until 2026 to ensure sufficient system adjustments and preparation.

Predictions

1. Expanding South Korea's Cryptocurrency Futures Market
Despite strict restrictions preventing Korean traders from participating in futures trading, South Korea's market continuously demonstrates impressive trading volumes. From 2001 to 2011, the nation held a dominant position in the global derivatives market, leading stock market futures for an entire decade. If institutional integration or a regulated route for futures trading were to emerge, South Korea could once again reclaim its status as a global leader, mirroring its groundbreaking achievements of 2001.

2. Monopoly Concerns
The monopoly of major exchanges, like Upbit and Bithumb, has raised concerns within the industry, highlighting the need for diversification. This has paved the way for the emergence of alternative cryptocurrency service providers. Among them, League of Traders stands out, leveraging its substantial Korean trader base and strong regulatory potential to position itself as a key partner in reshaping and diversifying the market landscape.

3. Web3 Growth Driven by Taxation and Regulation
The introduction of taxation and regulatory frameworks could trigger a "balloon effect," driving heightened activity in DeFi and Web3 markets. As attention shifts beyond centralized exchanges such as Upbit and Bithumb, social platforms with robust retail user bases expanding into Web3 are poised to take center stage. In this evolving landscape, social trading platforms like League of Traders emerge as key alternatives, capitalizing on their established user engagement and adaptability within the ecosystem.

Reported by League of Traders

Disclaimer League of Traders has analyzed the South Korean cryptocurrency market based on official data published by institutions and internal data from League of Traders. This report is not intended as investment advice. The information provided is for reference purposes only and does not constitute legal, tax, financial, investment, or regulatory advice and should not be relied upon as a professional opinion.

League of Traders makes no guarantees or warranties regarding the accuracy, completeness, timeliness, suitability, or validity of the information contained herein. Furthermore, there is no obligation to update forward-looking statements to reflect future events or circumstances occurring after the publication date.