Korean Won Crypto Trading Hits 30% Global Share, Raising Liquidity Concerns

South Korea’s won-denominated crypto market is exerting outsized influence on global price discovery, with Korean won (KRW) trading accounting for roughly 30% of worldwide spot cryptocurrency volume—cementing the country as the No. 2 fiat-to-crypto hub after U.S. dollar markets, according to new research from Kaiko Research.

In a recent report, Kaiko Research analyst Laurens Fraussen said Korea’s spot market combines three defining traits: heavy concentration on two domestic exchanges, a pronounced tilt toward 'altcoins', and comparatively 'shallow liquidity' despite massive turnover. Those characteristics, he argued, make April 2026’s rollout of real-time risk management monitoring requirements a potentially pivotal regulatory inflection point for market resilience.

Kaiko’s data show that Korea—home to about 52 million people—recorded an average of roughly $134 billion in monthly cryptocurrency trading volume from 2021 through 2026. The report attributes that scale to a mix of structural and cultural factors: smartphone penetration above 95%, advanced digital payments infrastructure, a relatively constrained environment for cross-border capital movement, and high social acceptance of crypto investing.

Two exchanges dominate KRW liquidity

Unlike the euro and dollar spot markets, which tend to be distributed across multiple venues, Korea’s KRW trading is overwhelmingly concentrated. Kaiko estimates Upbit accounted for 50.59% of KRW-based trading, while Bithumb captured 40.57%, leaving only a small remainder for smaller local platforms. By comparison, USD activity is spread across Binance, Coinbase, Kraken and other large exchanges, while EUR flows are also more fragmented across venues.

Market structure matters because concentration can amplify operational and liquidity risks: outages, sudden tightening of risk controls, or a rapid withdrawal of market-making activity at one major venue can quickly ripple across local prices—and, given Korea’s share of global spot volume, potentially feed back into broader market dynamics.

Korea is an 'altcoin-heavy' spot market

Kaiko’s report also highlights Korea’s unusually strong preference for altcoins relative to global norms. From 2024 through April 2026, Korean exchanges posted average weekly trading volume of about $26.22 billion, with altcoins representing 85% of activity. Bitcoin (BTC) accounted for 9% and Ethereum (ETH) for 6%—equivalent to roughly $22.3 billion in weekly altcoin volume versus $2.4 billion for BTC and $1.6 billion for ETH.

The report ties that skew to Korea’s retail-driven market microstructure, where capital tends to rotate rapidly into smaller, more volatile assets. Since June 2024, weekly altcoin turnover exceeded $50 billion during overheated periods and held around $18–$20 billion even in quieter stretches. By contrast, BTC or Tether (USDT)-centric trading represented a more limited share of overall activity.

Liquidity quality lags despite headline volume

While KRW’s share of global spot turnover is striking, Kaiko cautioned that the 'quality of liquidity' looks weaker than the volume suggests. Using BTC-KRW market depth measured within 1% of mid-price, Kaiko estimates that since May 2024 Upbit typically posted about $1.0–$1.2 million in daily depth, Bithumb around $400,000–$500,000, Coinone roughly $200,000–$250,000, and Korbit about $150,000–$200,000. Aggregated across the Korean market, depth generally ranged between $2.0 million and $2.5 million.

Japan provides a contrasting benchmark in the report. Even with lower trading volume, Japanese venues appeared to maintain thicker order books: bitFlyer alone showed about $3.5 million of depth, while Bitbank posted around $1.0 million and Coincheck roughly $600,000. The comparison suggests that Korea’s high turnover does not necessarily translate into stronger order-book support or execution capacity during stress.

Stress events exposed fragility

The gap became more visible during bouts of volatility. Kaiko noted that amid geopolitical shocks in February and March 2026, Upbit’s BTC-KRW depth fell from around $1.4 million to $1.0 million, while Bithumb dropped to roughly $300,000. Coinone and Korbit saw depth cut by about half and did not show a meaningful rebound over the period cited in the report.

Spread data pointed in the same direction. During March and April 2026, BTC-KRW bid-ask spreads averaged about $8–$12 on Upbit and $12–$16 on Bithumb, but widened substantially on smaller platforms—roughly $30–$40 on Coinone and $50–$70 on Korbit. In mid-March’s more volatile conditions, spreads expanded across venues, with Korbit showing the sharpest swings—underscoring material differences in execution quality even within the same KRW market.

Why April 2026 regulation matters beyond Korea

Against this backdrop, Kaiko framed Korea’s April 2026 introduction of real-time risk management monitoring as more than a domestic compliance update. In the report’s view, the requirement is tailored to the market’s defining features—very high turnover, 'altcoin' concentration, relatively thin depth, and exchange dominance by a small number of venues.

Because KRW trading represents close to one-third of global spot volume, the report argues that a major system disruption or liquidity deterioration at a top Korean exchange could have spillover effects beyond local markets, affecting global price formation and short-term volatility.

Kaiko’s analysis ultimately portrays the KRW market as a central pillar of global spot crypto activity—one with meaningful influence, but also structural vulnerabilities. Sustaining Korea’s position as the world’s second-largest fiat-to-crypto hub, the report concludes, may require progress not just in expanding volume but in strengthening 'liquidity depth' and institutional-grade risk controls across the ecosystem.