Trading Volume on South Korean Crypto Exchange Upbit Crashes 75%

Daily trading volume on South Korea's biggest cryptocurrency exchange has tumbled 75% from this year's high in a sign that frenzied trading in alternative cryptocurrencies (altcoins) has fizzled and digital assets other than market leaders bitcoin (BTC) and ether (ETH) may struggle to maintain lofty valuations.

Upbit, which lists 192 cryptocurrencies and offers trading in 309 pairs, registered just $3.79 billion of volume in the past 24 hours, according to data source CoinGecko. That's down from as high as $15 billion on March 5, when TradingView data shows the total market cap of altcoins surged to a two-year high of $788 billion. Market cap has since steadied at about $750 billion.

"Crypto trading volumes started skyrocketing in early March as a wave of altcoin activity hit the market," Matrixport said in a Telegram broadcast. "The anticipation of the Dencun upgrade with low transaction fees caused this mania, and some political developments brought crypto to the forefront of the political election. However, with volumes declining, the sustainability of the altcoin rally comes into question."

Daily volume on Upbit rocketed from $2 billion in the two weeks to March 5 as bitcoin's move to record highs above $70,000 and Ethereum's Dencun upgrade spurred risk-taking in other cryptocurrencies, including meme coins. Such was the trading frenzy that, at one point, volumes on South Korea-based crypto exchanges surpassed the local stock market activity.

South Korean crypto fans appear to focus more on altcoins than bitcoin and ether, the two largest cryptocurrencies by market cap. A study by DeSpread Research in October said Upbit's investors are primarily interested in maximizing profits through altcoins and tend to accept the high risks associated with these coins. Bitcoin and ether trading pairs account for a smaller portion of total volume on Upbit than on Nasdaq-listed Coinbase (COIN), where activity is mainly concentrated in BTC an ETH.

At the time of writing, bitcoin-Korean won and ether-won trading pairs accounted for just over 9% of the total 24-hour trading volume of $3.8 billion. The rest came from altcoin-fiat trading pairs.