South Korea’s impact on Bitcoin is becoming more evident as the cryptocurrency market experiences a decline. Recent data from South Korea reveals some interesting trends amidst the ongoing price fluctuations.
According to analysis provided by Kaiko, Bitcoin transaction volumes in South Korea have dropped significantly in the second quarter. In contrast, major exchanges in the United States have seen an increase in liquidity.
While Binance and Bybit were the leading platforms for Bitcoin sales last week, the trading volumes on South Korea’s top exchanges – Upbit, Bithumb, Coinone, and Korbit – have plummeted from an average of $35 billion in the first quarter to $6 billion in early June. This decline follows a period in which Korean Won trading volumes briefly surpassed USD trading volumes in the first quarter.
The decline in South Korea’s market has been particularly noticeable at Upbit, which has seen its market share drop to 67%, its lowest level since February, compared to its main local competitor, Bithumb.
One possible explanation for this decline could be the diminishing risk perception following higher-than-expected inflation in the US and the reassessment of expectations for a FED interest rate cut. Upbit and Bithumb offer a wider range of high-volume trading pairs compared to other exchanges, with the top ten pairs accounting for only 43% of Upbit’s trading volume, as opposed to 70% on Coinbase and Kraken.
Meanwhile, major US exchanges have shown a significant narrowing of bid-ask spreads, indicating improved liquidity for Bitcoin. The spread, which represents the difference between the highest buyer price and the lowest seller price, has decreased on exchanges like Bitstamp, Coinbase, and Kraken.
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