The South Korean crypto trading mania has seemingly returned, fueled by a surge in XRP tokens.
Trading volume for XRP spiked to billions of dollars on UpBit, Bithumb and Korbit, three of Korea's top exchanges by volume, on the back of the token's 26% rise in the past week.
In the past 24 hours, XRP trading made up 37% of all volume on Bithumb, 18% of volume on UpBit and a staggering 50% of all volume on Korbit, data from CoinGecko and CoinMarketCap shows. These volumes were against the U.S. dollar on UpBit and against the Korean won on Bithumb and Korbit.
Bitcoin (BTC) and ether (ETH) usually account for the majority of the trading activity on these exchanges, which makes the XRP volume surge an anomaly.
UpBit led global XRP trading volumes with over $790 million worth of tokens traded in the past 24 hours. Crypto exchange Binance, in comparison, traded a relatively smaller $720 million, CoinGecko data shows.
In crypto circles, South Korean traders are infamous for pushing euphoric rallies on tokens. The so-called Kimchi Premium originates from the region – where prices of bitcoin on local exchanges can trade at a premium of as much as 30% compared to international counterparts, driven by local demand.
Some of that volume may be attributable to wash trading, a manipulative technique where in a traders continually buy and sell the same asset to drive up volumes in order to create a false impression of market activity.
The interest in XRP comes amid speculation that the token might be classified as a commodity by the U.S. Commodity Futures Trading Commission (CFTC), after the CFTC classified bitcoin and ether as commodities in a lawsuit against Binance.
This in turn may hurt the U.S. Securities and Exchange Commission's (SEC) case against Ripple in which the regulator claims that XRP tokens are securities. Classification as a commodity could mean Ripple wins the case – which some traders consider bullish for XRP.
"The bullish impulse stems from Ripple's case versus the SEC, where optimism for Ripple's win seems to be becoming more dominant," Lewis Harland, portfolio manager at Decentral Park Capital, said in a market update on Wednesday
"Maybe that Ripple win sets off a bullish impulse down the risk curve (alt season)," Harland added.
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