Cracks are emerging in the Upbit-Bithumb duopoly that has long dominated South Korea's cryptocurrency exchange market, as Coinone and DigitalX expand trading volumes and market share despite an overall market slowdown.
Upbit's domestic market share fell to 59.91% during the first 15 days of October, down 5.75 percentage points from September, according to data platform CoinGecko on the 16th. It was the first time in a year of monthly analysis that Upbit dipped below 60%. Coinone, meanwhile, rose to 8.14% from 5.79%, and DigitalX climbed to 3.27% from 1.83%.
Market share was calculated by adding up daily trading volumes at the country's five exchanges — Upbit, Bithumb, Coinone, DigitalX and Gopax — and measuring each exchange's portion of the total. September figures cover the full month, while October figures cover the 1st through the 15th.
Upbit's trading volume shrank more sharply than the market as a whole. Average daily volume across the five exchanges fell 11.08% to $1.8067 billion in the first 15 days of October from $2.03186 billion in September. Upbit's volume dropped 18.87% to $1.08243 billion from $1.33424 billion over the same period.
Coinone's average daily volume rose 24.95% to $147.04 million from $117.68 million. DigitalX's volume jumped 59.27% to $59.15 million from $37.14 million. Their combined market share widened to 11.41% from 7.62%. Bithumb's trading volume fell 4.55%, but its share rose to 28.66% from 26.70%.
The gains by smaller exchanges are backed by major financial firms. DigitalX, supported by Mirae Asset Group, has offered an aggressive promotion since August that waives trading fees on its won market for one year. Coinone, which attracted investment from Korea Investment & Securities, countered by scrapping trading fees entirely. "Over the medium to long term, the competitive landscape of the market could shift," one industry official said.