In South Korea’s cryptocurrency market, a small group of large-scale investors, known as “whales”, are responsible for the vast majority of trading activity. This high concentration of influence significantly shapes market dynamics, affecting everything from asset prices to regulatory focus.
The Scale and Concentration of Whale Activity
Data released by South Korea’s Financial Supervisory Service (FSS) reveals the extent to which large investors dominate the landscape. On the major domestic exchanges, the top 10% of users account for over 90% of all trading volume.
The concentration is particularly pronounced on several key platforms. During the first half of the year, the share of volume attributed to these whale investors was 97.97% on Bithumb, 97.95% on GOPAX, 97.54% on Coinone, and 97.52% on Korbit. Even on Upbit, which had the lowest concentration among the top exchanges, whale activity still accounted for 89.36% of all trading volume. This trend is also stronger for large-cap assets, though it remains high even for smaller-cap cryptocurrencies.
Market Impact and Key Characteristics
This dominance by a small number of players has tangible effects on how the market functions. Analysts often attribute the famous “Kimchi premium” where Bitcoin trades at a higher price in Korea than in other global markets to this market structure, which can hinder arbitrage.
Another notable phenomenon is the “listing pump”, where the announcement of a new asset on a major exchange like Upbit or Bithumb leads to a significant and immediate price increase. The data suggests that these sudden price movements are likely driven by the coordinated actions of whales, rather than a broad wave of retail buying.
Regulation, and Exchange Responses
The high concentration and its potential implications have not gone unnoticed by authorities. South Korea has established a mature regulatory framework for virtual asset service providers, which includes strict KYC (Know Your Customer) and AML (Anti-Money Laundering) protocols that all licensed exchanges must follow.
Regulators maintain a active watch. The Financial Supervisory Service (FSS) has recently emphasized the importance of user protection and responsible practices, warning companies against “overly aggressive promotions and risky product launches” that could erode user trust. This scrutiny is ongoing, with regulatory actions sometimes taken against specific exchanges.
The landscape is dominated by a handful of major exchanges, with Upbit and Bithumb alone accounting for nearly 96% of the country’s total trading volume. This means that the policies and health of these two platforms are critical to the entire South Korean crypto market.
I hope this overview provides a clearer picture of the influential role whales play in the South Korean crypto ecosystem. Should you wish to explore the specific trading strategies or the assets currently attracting major interest, I am happy to assist further.
