Bithumb, once South Korea’s leading crypto exchange, is regaining its strength after years of setbacks. The platform now controls 25% of the country’s crypto trading volume, a sharp rise from the single digits it held in 2023. At its peak in early 2024, Bithumb’s market share even went above 33%, marking a major turnaround.
Bithumb’s decline started following a $30 million hack in 2018, followed by technical and regulatory challenges. These challenges enabled its competitor, Upbit, to surpass it and lead the market. However, presently, due to intense marketing, platform enhancement, and regulatory challenges confronting Upbit, Bithumb is regaining traction.
Data from blockchain analytics company Kaiko shows that Bithumb’s trading volume has surged significantly, attesting to its resurgence. Although Bithumb has recovered, Upbit still leads South Korea’s exchanges, with more than 60% of crypto trading conducted on the platform. That is a decline from 75% market share only last year. With growing pressure from regulators and the increasing competition in the market, Upbit’s dominance is beginning to dwindle.
The South Korean Exchange will conduct an Initial Public Offering (IPO) by the end of 2025. The exchange will initially list on South Korea’s Kosdaq, followed by a potential follow-up listing on the NASDAQ. For this purpose, Bithumb will split into two entities:
- Bithumb Korea will handle the exchange business and spearhead the listing on the Kosdaq.
- Bithumb A will handle its wider business interests, including asset management and subsidiaries such as Bithumb Partners and Bithumb Investment.
Post-restructuring, Bithumb Korea will own 56% of the exchange, while Bithumb A will hold the remaining 44%. Samsung Securities has been appointed as the underwriter for the IPO.
South Korean crypto market is highly regulated, with stringent licensing regulations, robust banking relationships, and expensive compliance. These stringent conditions have pushed numerous smaller platforms out of business, with only Bithumb and Upbit left to dominate the local market. Foreign exchanges have likewise largely been shut out by the regulatory conditions.
A few contestants in South Korea’s next presidential election have vowed to permit Bitcoin ETFs and welcome foreign crypto companies into the market. Hong Joon Pyo, the candidate for the People Power Party, has committed to a sweeping ₩50 trillion investment in AI, crypto, and blockchain and promised to ease regulations like the Trump administration while pushing virtual assets as an all-of-industry.
Nevertheless, previous polls have witnessed similar promises that went unfulfilled, and it will depend on whether this time will be different amidst increasing international pressure.
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