Over ₩110 billion has left South Korea’s crypto platforms for offshore exchanges, draining local order books and dragging market depth to fresh lows, according to Kaiko.
While Korean exchanges still process massive trade numbers, their design is reportedly locking out flexibility, as retail activity remains high, but the market structure has barely evolved. Traders in South Korea are stuck with chunky price increments that slow execution and make precision trading nearly impossible.
And yes, UPbit still leads the pack, but dominance doesn’t mean immunity. The outflows prove that deeper liquidity doesn’t equal better liquidity when execution costs are going up.
Large ticks restrict order books and slow trades on local Korean exchanges
KRW markets on exchanges like UPbit and Bithumb have always run on large tick sizes. The reason? Stability. Bigger ticks help filter out noise and tame rapid swings. It keeps the order book clean, especially for the country’s army of retail traders. But that stability comes at a cost, and South Korea is feeling it now.
Each exchange decides how small or large a tick is, and that controls how finely prices can change. On Korean platforms, orders clump together on the same levels, which can make depth look strong, but this also means spreads are wider, so traders end up paying more just to get in or out.
UPbit divides its markets into three: KRW, BTC, and USDT. The KRW market includes pairs like XRP/KRW.
According to Kaiko, UPbit owned about 70% of the country’s total trading volume throughout 2025, while Bithumb came second, and Coinone + Korbit barely register in comparison.
Transaction volumes surge hard during global shocks, like when Donald Trump took office again or during the October 10 stock crash.
By the end of 2025, the market in South Korea had basically narrowed down to two major players. UPbit remained the primary destination. Its edge came from handling more trades on more popular KRW pairs.
That dominance also meant higher reported depth and smoother processing. But all that surface strength hasn’t stopped funds from flying offshore.
Korea’s crypto liquidity gets squeezed by law, shocks, and price rallies
Real-world events and token behavior are reshaping the way South Korea handles crypto liquidity. One standout issue is the Kimchi premium. It happens when Korean exchanges show higher prices than foreign platforms, especially for Bitcoin.
This premium doesn’t last long, but it keeps popping up. When it does, traders jump on arbitrage opportunities, yanking liquidity across borders.
That dynamic flipped again when Bitcoin hit new highs during 2025, as bull runs brought new capital into the system. Spreads tightened. Order books filled out. Top pairs became more active. Traders rushed in, which strengthened depth and made trades easier to execute. Unlike the martial law episode, this kind of surge built a loop. High prices attracted volume, which fed liquidity, which helped execution.
The Kimchi premium, political shocks, and bull cycles show how unstable South Korea’s liquidity really is. Price gaps keep returning. Law and volatility drain books overnight. And high prices offer only a temporary fix.
