Trading volume across South Korea’s five major won-based crypto exchanges fell 54.6% year over year in the first half of 2026 as liquidity became increasingly concentrated on market leader Upbit.
South Korea crypto volume drops below $367B
Upbit, Bithumb, Coinone, Korbit and Gopax generated about $366.58 billion in combined trading volume during the first six months of the year, NexBlock reported. That represented a 54.6% decline from the corresponding period in 2025.
The contraction continued in July. From July 1 through July 27, the five exchanges recorded cumulative trading volume of approximately 17.34 trillion won, down 16.9% from the same period in June.
The figures point to weaker activity across South Korea, one of Asia’s most active retail crypto markets. They also show that lower overall volume has not affected all exchanges equally.
Upbit processed about 11.69 trillion won during the July period. Its trading volume fell 10%, but its market share increased from 62.3% to 67.4% as competing platforms suffered steeper declines.
Bithumb recorded approximately 4.71 trillion won in volume. Its share of the five-exchange market dropped from 30.7% to 27.1%, widening the gap between Upbit and Bithumb to 40.3 percentage points.
Upbit gains as liquidity becomes concentrated
NexBlock attributed the changing competitive landscape to liquidity moving toward the largest platforms during the broader market slowdown.
Deep liquidity can attract more traders by supporting larger orders with less price slippage. That advantage can reinforce the position of leading exchanges when overall activity declines, leaving smaller platforms with fewer trades and thinner order books.
Coinone, Korbit and Gopax now face growing pressure to differentiate themselves beyond retail spot trading. According to NexBlock, smaller exchanges are exploring partnerships with securities firms, institutional services and internal restructuring.
Future competition could therefore depend less on headline trading volume and more on stablecoin liquidity, regulatory compliance, institutional access and cooperation with traditional financial companies.
For US investors, South Korean exchange data can provide insight into retail demand in a major Asian market, although the won-based platforms primarily serve domestic users. Reduced Korean volume may weaken one source of global altcoin liquidity and price discovery, particularly for tokens that historically attracted strong local trading interest.
Crypto tax could reshape trading activity in 2027
The volume decline comes as South Korea prepares to implement its long-delayed cryptocurrency tax.
Finance Minister Koo Yun-cheol confirmed on July 29 that the government will begin taxing crypto gains on Jan. 1, 2027, as previously scheduled.
“We are pushing forward with the plan to tax cryptocurrency starting next year as scheduled,” Koo said.
Income generated by transferring or lending virtual assets will be classified as other income. Annual gains exceeding 2.5 million won, or about $1,740, will face a 20% national tax, while a local income tax will raise the combined rate to 22%.
Investors who remain below the annual threshold will not owe tax under the framework. Taxpayers are expected to file their first returns in May 2028 for gains earned during 2027.
The policy creates an additional consideration for domestic traders after three previous delays. Its effect on exchange volume will depend partly on how platforms implement transaction reporting and cost-basis calculations before the rules take effect.
Smaller exchanges seek new sources of growth
South Korea is simultaneously expanding state-backed investment in strategic industries, though the initiative is separate from its crypto tax and exchange policies.
The government approved plans for a new account under the Korea Investment Corporation, the country’s sovereign wealth fund. The account will begin with at least 20 trillion won, or approximately $13.7 billion, and may invest domestically in artificial intelligence, data centers and other strategic sectors.
KIC has historically focused on overseas assets. The expanded mandate reflects a wider effort to direct institutional capital toward domestic industries while seeking long-term returns.
For crypto exchanges, the immediate challenge remains rebuilding activity while complying with tighter rules. Upbit’s rising market share suggests smaller platforms may need institutional partnerships, stablecoin services, or structural changes to compete in a market where total trading volume continues to fall.
