South Korea’s crypto market is slowing down, with trading activity dropping sharply in the first half of 2026. At the same time, the country’s largest exchange, Upbit, is becoming even more dominant as smaller competitors struggle to keep up.
Key Highlights
- South Korea’s five largest crypto exchanges handled about $366.6 billion in trading volume during the first half of 2026.
- Total trading volume fell 54.6% compared with the same period last year.
- Upbit increased its market share to 67.4% despite lower overall trading activity.
- South Korea plans to introduce a 22% tax on crypto gains starting January 1, 2027.
Trading Activity Falls Sharply
According to NexBlock, the country’s five major exchanges—Upbit, Bithumb, Coinone, Korbit, and Gopax—recorded a combined trading volume of approximately $366.58 billion during the first six months of 2026.
That represents a steep 54.6% decline from the same period in 2025.
The slowdown continued into July. Between July 1 and July 27, trading volume across the five exchanges reached around 17.34 trillion won, down 16.9% from the previous month.
The numbers suggest that investor activity has weakened significantly in one of Asia’s most important retail crypto markets.
Upbit Continues to Pull Ahead
While the overall market shrank, Upbit strengthened its position.
The exchange processed roughly 11.69 trillion won in trading volume during the July period. Although its own volume fell about 10%, competitors experienced even larger declines.
As a result, Upbit’s market share increased from 62.3% to 67.4%.
Meanwhile, Bithumb saw its market share fall from 30.7% to 27.1%, widening the gap between the two largest exchanges.
The trend suggests traders are increasingly concentrating their activity on platforms with deeper liquidity and larger order books.
Why Liquidity Is Moving to Larger Exchanges
During slower markets, traders often prefer larger exchanges because they can handle bigger transactions with less price impact.
This creates a cycle where:
- More traders use the largest exchange.
- Liquidity improves further.
- Smaller exchanges become less competitive.
- Even more trading shifts toward the market leader.
As a result, Coinone, Korbit, and Gopax are reportedly exploring new strategies, including institutional services, partnerships with traditional financial firms, and business restructuring.
Crypto Tax Arrives in 2027
Another major change is approaching for South Korean crypto investors.
Finance Minister Koo Yun-cheol confirmed that the country’s long-delayed crypto tax will finally take effect on January 1, 2027.
Under the new rules:
- Annual crypto gains above 2.5 million won (about $1,740) will be taxed.
- Investors will pay a 20% national tax plus a 2% local tax, for a total rate of 22%.
- Gains below the threshold will remain tax-free.
- The first tax filings are expected in May 2028 for gains earned during 2027.
Many market participants will be watching closely to see whether the new tax affects trading activity once it comes into force.
Smaller Exchanges Face Growing Pressure
The challenge for smaller exchanges is becoming increasingly clear.
With trading volume falling and liquidity concentrating around Upbit, they may need to find new ways to attract users beyond traditional spot trading.
Possible growth areas include:
- Institutional crypto services
- Stablecoin products
- Partnerships with banks and securities firms
- Regulatory compliance solutions
- Digital asset custody services
What to Watch Next
The coming months will show whether South Korea’s crypto market can recover from its current slowdown.
Investors will be watching:
- Whether trading volume stabilizes.
- If Upbit continues gaining market share.
- How smaller exchanges adapt.
- The impact of upcoming crypto regulations.
- Preparations for the 2027 crypto tax rollout.
For now, South Korea’s crypto market remains active, but trading is becoming increasingly concentrated in the hands of one dominant player while overall activity continues to decline.
