Major Korean Exchanges are Expanding Beyond Korea

analyst101 (42)in #blockchain • 6 years ago (edited)

Major Korean Exchanges are Expanding Beyond Korea

Korean Exchanges Are Still Extremely Profitable
On September 28th, I wrote an article about how even though the cryptocurrency market fell recently, the major Korean exchanges are doing well especially compared to year 2015 and 2016.

For example, following is a chart showing yearly trading volume (in USD) for Bithumb, Korbit, Coinone, and Upbit.

In the case of Bithumb, although the trading volume fell in 2018, its trading volume is over 73 times compared to in 2015.

Korean Exchanges Are Expanding Beyond Korea
While the major Korean exchanges are still profitable, many of them are interested in expanding globally. For example, Bithumb sold its majority stake to a Singapore-based BK Global Consortium for 400 billion won (approximately $350 million). Bithumb also created its Hong Kong-based Decentralized Exchange (DEX), and it’s also planning to create a new office in Europe. Dunamu, which operates Upbit, established a new office in Singapore this February. Coinone launched its cryptocurrency exchange in Indonesia.

“Bithumb’s Hong Kong-based DEX exchange.”

“Coinone’s cryptocurrency exchange based in Indonesia.”

Why the Expansion?

1. To Avoid the Overly Saturated Cryptocurrency Exchange Market in Korea
There are several new exchanges launching almost every month, and the new Korean exchanges often engage in risky or aggressive strategies such as providing large airdrops or dividends to attract new investors.

“Exchanges that pay dividends are popular these days. Source: bitboysesibong”

In addition, major global cryptocurrency exchanges already entered or are planning to enter the Korean market. For example, both Huobi and OKEx are trying to expand their market share. Binance is interested in launching a Korean office as well.

“I knew Binance was coming to Korea before the official announcement. It was an honor to interpret for the Binance team when they announced their intention to expand to Korea.”

2. To Gain Greater Influence in Emerging Markets
Cryptocurrency and blockchain are popular around the world. However, trading cryptocurrency is not always easily accessible around the world. Thus, these Korean cryptocurrency exchanges enter these markets to facilitate cryptocurrency trading. In addition, several emerging economies have greater potential for growth as their population and population growth are bigger than Korea.

“Indonesia’s population more than 5 times bigger than Korea’s population. In addition, Indonesia’s population is growing much more rapidly than Korea.”

3. To Hedge Against the Korean Government’s Crackdown on Blockchain Industries
Coinnest’s four executives faced trials for supposedly embezzling funds. Coinone’s executives and some of its traders were accused of gambling because they used the margin trading program. Both Upbit and Bithumb were investigated by the government for potential fraud.

“The seizure by the government helped to crash both the cryptomarket and Upbit’s reputation.”

In contrast, Singapore is friendly toward cryptocurrency and blokckchain companies, which is a reason why many ICOs are based in Singapore. Indonesia officially recognized cryptocurrency as a commodity, removing most of regulatory uncertainty.

Korea Needs to Adopt and Regulate Cryptocurrency and Blockchain Industries
So many cryptocurrency investors in Korea suffered from scam ICOs and hacked exchanges. Some form of regulation is necessary. If the government can adopt and regulate the market, then it might help to create jobs that the country needs.

“The Korean market is not doing so well these days…”