TL;DR
- Trading volume on Upbit, one of South Korea’s leading cryptocurrency exchanges, hit a yearly high near $15 billion on March 5 before falling to just $2.6 billion on March 31.
- The increase in trading volume is related to Bitcoin’s new all-time high of $69,200 on the same day.
- Despite the rebound, trading volume decreased at the end of March, standing at $3.8 billion at the beginning of April.
Cryptocurrency exchange Upbit has experienced a rollercoaster of trading activity in March this year, reflecting the volatility inherent in the crypto market.
On March 5, Upbit hit an annual record with trading volume of nearly $15 billion, matching Bitcoin’s new all-time high of $69,200, according to official data from CoinGecko.
This dramatic increase in trading volume can be attributed in part to the launch of new Bitcoin exchange-traded funds (ETFs) in the United States, leading to renewed investor interest and an increase in trading activity.
The “Premium Kimchi” phenomenon, which refers to the disparity in Bitcoin prices on South Korean cryptocurrency trading platforms compared to international exchanges, also contributed to the increase in Upbit’s trading volume.
The price difference between South Korean exchanges and international platforms created arbitrage opportunities, enticing traders to capitalize on the price difference.
Nevertheless, the bustling trading momentum witnessed at Upbit failed to maintain its pace, culminating in a significant drop in trading volume to a mere $2.6 billion by the close of March.
This notable decline in UpBit prompts consideration of multifaceted factors
It could stem from market adjustments, reflecting the inherent volatility of cryptocurrency markets, wherein sudden shifts in sentiment or external influences often lead to significant fluctuations.
Additionally, waning investor confidence might have played a role, as apprehensions regarding the market’s stability or the sustainability of recent trends may have prompted a more cautious approach among traders.
Moreover, regulatory dynamics could have exerted their influence, with potential changes or announcements impacting market participants behavior and investment decisions.
Overall, while the precise catalysts for this decline may remain complex and multifaceted, it underscores the intricate interplay of factors shaping the cryptocurrency landscape and the nuanced considerations guiding market participants actions.
Despite fluctuations in trading volume, Upbit remains a major player in the cryptocurrency exchange landscape.
Although its parent company, Dunamu, reported a decline in net profits in 2023 due to a sluggish investment market and lower digital asset prices, Upbit continued its expansion efforts.
In January 2024, it obtained a Major Payments Institution license from the central bank of Singapore, signaling its commitment to expanding its services globally.
