South Korean cryptocurrency exchange Bithumb has increased its share of the local digital-assets market, now accounting for about 25% of the country’s trading volumes, according to analytics firm Kaiko. This marks a notable rise from its single-digit market share in 2023.

Bithumb’s recent gains come as it prepares for an initial public offering (IPO), expected by the end of 2025. South Korea is one of the world’s largest crypto markets, with retail traders playing a major role.

The market is highly regulated, with strict compliance requirements that have pushed smaller players out in recent years.

Founded as Xcoin in 2014 and rebranded in 2015, Bithumb was once a market leader, controlling over 70% of trading volumes. However, it fell behind rival Upbit, which dominated the market following the crypto boom during the pandemic.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ South Korea’s unique position as a crypto powerhouse shaped by retail investors

South Korea represents an outlier in global crypto markets, with approximately one-third of its total population (18 million people) investing in digital assets worth about US$74.5 billion as of December 2024, according to Bank of Korea data [original article].

This remarkable retail participation has created a market where trading volumes occasionally exceed those of the country’s stock exchanges, making it one of the largest crypto markets globally by fiat trading volume [original article].

Unlike Western markets dominated by Bitcoin and Ethereum, Korean retail investors show notable interest in altcoins, creating distinct trading patterns and opportunities for exchanges [original article].

The market’s structure has evolved into a rigid duopoly, with Upbit and Bithumb together controlling approximately 98% of trading volume, a concentration that intensified after regulatory changes forced smaller competitors out of the market 1.

This concentration of market power explains why Bithumb’s gain in market share represents such a significant shift in the competitive landscape.

2️⃣ Bithumb’s comeback story follows years of security challenges and market loss

Bithumb’s current resurgence to approximately 25% market share represents a remarkable recovery for an exchange that once dominated with over 70% of the market but had fallen to single-digit share in 2023 [original article].

The exchange’s troubled history includes a major security breach in June 2018 that resulted in a US$32 million loss, followed by a dramatic financial reversal from profits of KRW 427.2 billion in 2017 to losses of KRW 205.5 billion (approximately $180 million) in 2018 2.

Bithumb’s competitive strategy appears focused on aggressive token listings and lower trading fees (0.15% compared to Upbit’s 0.25%), potentially explaining how it has managed to recapture market share ahead of its planned IPO 3.