The Korean won is now the world's dominant fiat currency in the crypto market. This is according to data from Kaiko. As the analysis portal writes, fiat trading volume in won exceeded that in U.S. dollars (USD) for the first time. The data refer to the first quarter of 2024.

Korean won beats US dollar. Source: Kaiko

According to the data, a total of $456 billion worth of cryptocurrencies were traded in won in the first quarter; more than $11 billion more than in U.S. dollars. The increased activity is due to an increasingly vibrant Korean crypto market.

By 2021, the Upbit exchange accounted for 82 percent of the market share in Korea. But competitors are catching up. Competitor Bithump's market share, for example, has tripled since October 2023. This is probably largely due to the company's zero-fee policy.

That the won has now become the world's leading fiat currency in the crypto market also has a cultural background. Smaller coins are more popular in Korea than large cryptos such as Bitcoin and Ethereum. At Upbit, Bitcoin's market share is only nine percent. Its trading activities have often caused wild price movements. For example, Bitcoin Satoshi Vision, Theta Network, LOOM, Tezos, Immutable X and most recently Pyth.

In addition, the so-called Kimchi Premium, a benefit on crypto prices in Korea, serves as an indicator of market sentiment, a kind of early warning system. The Kimchi Premium is a consequence of the country's strict capital controls. These also mean that it cannot be taken advantage of through "arbitrage trading.

The Terra Luna case has sparked a heated debate in South Korea over the regulation of cryptocurrencies. Lee Bok-hyun, chairman of the supervisory authority FSS, meets with SEC Chairman Gary Gensler in May.