South Korean Exchange Upbit Surpasses Coinbase, OKX in July Trading Volume to Take No. 2 Spot for First Time

Upbit, a South Korean cryptocurrency exchange, surpassed centralized exchanges Coinbase and OKX in terms of trading volume for the first time in July, according to a report by CCData.

Centralized exchanges Coinbase and OKX saw their trading volume decline in July, with Coinbase’s volumes dropping by 11.6% to $28.6 billion, while OKX witnessed a 5.8% decline to $29 billion.

Upbit bucked the general market trend, witnessing a 42.3% increase in trading volume to $29.8 billion, pushing the exchange beto the second-largest platform by trading volume, after Binance. Coinbase was previously the second largest crypto exchange by trading volume.

Other South Korean exchanges including Bithumb and CoinOne also saw an increase in trading volume across July, the report said.

"The Korean market has thought to have been largely driven by retail traders who have built a reputation in the crypto sector. The Kimchi Premium is an example of this, a popular phenomenon which has historically been fueled by strong local demand for digital assets," said Jacob Joseph, a research analyst at CCData, in a note to CoinDesk.

The kimchi premium represents the difference between bitcoin's price on South Korean exchanges and the going rate on other global trading platforms. "This influx of volume, combined with the declining trading activity in other regions, has led to the increased dominance of Korean exchanges," added Joseph.

Although Binance remains the largest platform for spot trading in crypto, recording $208 billion in trading volume in July, the exchange’s market share declined for the fifth consecutive month in July. Binance’s market share now stands at 40.4%, its lowest mark since August 2022.

Upbit saw the largest market share increase in July, with the exchange now accounting for 5.8% of the trading volumes on centralized exchanges. Huobi Global and Kucoin also saw increases in market share in July.

The decline in market share for Binance comes as the exchange faces continued scrutiny from regulators, with the U.S. Securities and Exchange Commission accusing Binance and its CEO Changpeng "CZ" Zhao of offering unregistered securities to the general public, among other allegations, in June. The exchange also saw at least three of its top executives depart in early July.

"The recent concerns over possible regulatory action against Binance seem to have adversely affected the trading activity on the exchange, with users likely to prefer other alternatives," said Joseph.

UPDATE (Aug. 3 18:25 UTC): Added quotes from Jacob Joseph.