Upbit’s Iron Grip: 72% Market Share Threatens South Korea’s Crypto Diversity

South Korea, a powerhouse in the global cryptocurrency arena, is witnessing a troubling trend as Upbit, the nation’s leading exchange, has clinched a staggering 71.6% of domestic trading volume in the first half of 2025. With smaller platforms gasping for air and monopoly fears escalating, the very principles of decentralization and investor freedom that define crypto are under siege in this market.

• Upbit’s Overwhelming Lead: Commands 71.6% of South Korea’s crypto trading volume, totaling 833 trillion won ($642 billion).
• Smaller Exchanges Dying: Coinone, Korbit, and GOPAX cling to tiny shares, facing potential extinction.
• Monopoly Risks: Upbit’s dominance, amplified by a possible merger with tech giant Naver, could stifle competition and innovation.

Upbit’s Crushing Numbers: A Market Out of Balance

The stats paint a stark picture of South Korea’s crypto market. According to data from the Financial Supervisory Service (FSS), the total trading volume across all domestic exchanges reached 1,162 trillion won ($895 billion) in the first half of 2025. Upbit alone handled 833 trillion won of that—over $642 billion, or roughly $3.36 billion daily. To put that in perspective, at its peak dominance of over 80% last April, Upbit rivaled major U.S. platforms like Coinbase in sheer volume. Bithumb, the next in line, secured a 25.8% share with 300 trillion won ($223 billion), averaging $1.2 billion daily. Then there’s the struggling trio: Coinone at 1.8% with 20.8 trillion won ($16 billion), Korbit at 0.5% with 5.5 trillion won ($4.01 billion), and GOPAX at a pitiful 0.2% with just 2.8 trillion won ($2.15 billion). These smaller players aren’t just behind—they’re barely on the board.

User numbers echo this imbalance. Out of 10.17 million crypto users in South Korea, 53% trade on Upbit, 37% stick with Bithumb, and the remaining 10%—less than a million souls—are split among Coinone, Korbit, and GOPAX. The decline is brutal for some: Korbit, the country’s oldest exchange and once a trailblazer, saw its daily trading average nosedive from over 100 billion won in 2022 to a ghost-town level of 30 billion won in 2025. GOPAX, focusing mostly on crypto-to-crypto trades, is a faint whisper in the market. These platforms aren’t losing a race; they’re being lapped into obscurity.

Small Exchanges on Life Support: A Dying Breed

For those new to the crypto game, market share in this context means the percentage of total trading volume—buying and selling digital assets like Bitcoin (BTC), Ethereum (ETH), and various altcoins—that flows through a specific exchange. High market share often brings better liquidity, meaning trades execute faster with less price slippage (the difference between expected and actual trade prices), more token listings, and stronger user trust. This creates a network effect—a winner-takes-all dynamic where the big players get bigger, and Upbit is the textbook case in South Korea, as detailed in a recent report on Upbit’s overwhelming control of nearly 72% of the market. But when competition fades, so does choice, leaving users at the mercy of one platform’s policies, fees, or potential failures.

The plight of smaller exchanges like Coinone, Korbit, and GOPAX is a grim reminder of how unforgiving this space can be. These platforms often cater to niche markets or experimental tokens that giants like Upbit might overlook, fostering diversity in the altcoin ecosystem. Losing them isn’t just a local loss; it’s a blow to innovation across the blockchain landscape. As the Seoul Kyungjae newspaper bluntly put it:

“The domestic crypto market has effectively solidified into an Upbit monopoly. Coinone, Korbit, and GOPAX’s trading volumes were negligible, rendering their presence in the market insignificant.”

Monopoly Risks: Systemic Dangers Loom Large

Why should this matter to anyone beyond South Korean traders? Upbit’s stranglehold on the market isn’t just about numbers—it’s about power. When one exchange controls nearly three-quarters of trading activity, it can dictate terms: which tokens get listed, what fees users pay, and how the market evolves. If Upbit stumbles—whether from a hack, a regulatory hammer, or internal mismanagement—the fallout could cripple South Korea’s entire crypto ecosystem. An unnamed industry official didn’t mince words on the stakes:

“If a specific exchange effectively monopolizes listing policies and fee structures, that could spread systemic risks to the entire market. The financial regulators must ensure a minimum level of fair competition. If not, investors will be left with a diminishing set of options.”

South Korea’s history with crypto adds context to these fears. The 2017-2018 boom in Initial Coin Offerings (ICOs)—where projects raise funds by issuing new tokens—saw rampant scams, prompting the government to impose strict oversight on exchanges. Later regulations, like the 2021 Virtual Asset Service Provider licensing requirements, raised compliance costs that smaller platforms struggled to meet, inadvertently tipping the scales toward giants like Upbit. Now, with Upbit’s operator Dunamu nearing a merger with Naver, South Korea’s largest internet company, the risk of entrenched dominance skyrockets. Naver’s tech prowess and deep pockets could turbocharge Upbit’s platform, but it also raises red flags about antitrust issues and further centralization.

Counterpoints: Does Dominance Have a Silver Lining?

Let’s play devil’s advocate for a moment. Upbit’s dominance isn’t entirely a villainous plot—it brings undeniable benefits. A single, trusted platform can streamline trading with unmatched liquidity, tighter spreads, and a smoother user experience. For Bitcoin (BTC) traders, especially, having a dominant exchange often means easier access to the king of crypto with minimal hassle. South Korean investors, many of whom are retail players, might appreciate the stability and familiarity Upbit offers over juggling multiple shaky platforms. But here’s the rub: stability at the cost of competition is a slippery slope. Crypto wasn’t built to crown new gatekeepers; it’s about dismantling them. Swapping one form of centralization for another is a betrayal of the decentralized dream we’re fighting for.

Corporate Moves and Regulatory Silence

The corporate landscape adds more layers to this saga. While the Dunamu-Naver merger looms as a potential game-changer, Bithumb isn’t sitting on its hands. With plans for a NASDAQ listing in 2026, Bithumb could gain the capital and credibility to challenge Upbit’s reign. Yet, with a market share gap this vast, it’s hard to envision a comeback without a major catalyst. South Korean lawmakers, including Lee Heon-seung of the People Power Party who requested the FSS data, are sounding alarms, but action remains elusive. The FSS is watching, yet no concrete policies have emerged to level the playing field. Could measures like market share caps or tax incentives for smaller exchanges help? Possibly, though overzealous regulation risks spooking investors or disrupting market stability—a delicate balance to strike.

Global Lessons: A Clash with Decentralization

Zooming out, South Korea’s predicament mirrors global trends in the crypto space. Network effects have long consolidated power in the hands of a few—think Binance worldwide or Coinbase in the U.S. The catastrophic collapse of FTX in 2022 underscored the dangers of over-reliance on a single entity. If South Korea’s smaller exchanges vanish, it’s a microcosm of a broader failure to nurture a resilient, competitive ecosystem. As a Bitcoin maximalist, I see BTC as the ultimate store of value, the bedrock of this revolution. Yet, I can’t ignore that altcoins and other blockchains like Ethereum fill critical niches—faster transactions, smart contracts, and experimental use cases—that Bitcoin isn’t designed to tackle. Exchanges, even underdogs, are the gateways to that diversity. Losing them guts the spirit of innovation.

Moreover, user security is a ticking time bomb in this scenario. Concentrating funds on one platform like Upbit amplifies the impact of potential hacks or scams—issues that still plague the industry. Smaller exchanges, while not immune, often spread the risk. Past failures, like GOPAX’s exposure to Genesis Global Capital’s collapse in 2022, serve as grim reminders of what’s at stake. South Korea’s market isn’t just a local concern; it’s a warning for the global crypto community about the perils of unchecked centralization.

What’s Next for South Korea’s Crypto Future?

South Korea stands at a crossroads. Upbit’s ascent showcases the raw power of scale and trust in this industry, but it also exposes how quickly the ideals of decentralization can erode. Beyond hoping regulators wake up, there are actionable steps to consider. Mandating transparency in listing policies or providing grants to smaller exchanges could breathe life into competition. On the community front, developers and users could rally behind decentralized exchanges (DEXs) or interoperable tools to reduce reliance on any single platform. This aligns with the ethos of effective accelerationism—pushing for rapid, innovative progress while preserving freedom.

Let’s not sugarcoat it: the slow death of smaller exchanges isn’t just a tragedy for South Korean traders; it’s a gut punch to the global fight for a freer financial system. Upbit might be a titan today, but if history teaches us anything—from Mt. Gox to FTX—it’s that titans fall hard. The question is whether South Korea will act to preserve diversity before it’s too late, or if we’re doomed to watch another cautionary tale unfold.

Key Takeaways and Questions for Reflection

• How dominant is Upbit in South Korea’s crypto market?
  Upbit holds a commanding 71.6% of trading volume, processing 833 trillion won ($642 billion) in the first half of 2025, far outstripping rivals.
• Are smaller crypto exchanges at risk of disappearing?
  Yes—Coinone (1.8%), Korbit (0.5%), and GOPAX (0.2%) are on the brink with tiny market shares and shrinking user bases, struggling to survive.
• What are the dangers of Upbit’s monopoly in the crypto space?
  It poses systemic risks by centralizing control over fees and listings, limiting investor choice, and amplifying the impact of any potential Upbit failure.
• Can Bithumb or regulatory action restore balance?
  Bithumb’s 2026 NASDAQ listing might offer a boost, but the gap is wide; regulators like the FSS need to enforce fair competition, though plans are unclear.
• Does Upbit’s dominance undermine decentralization?
  Absolutely—it clashes with crypto’s core mission of freedom and diversity, replacing traditional gatekeepers with a new centralized power.