South Korea's Crypto Market Sinks 54.6% Amidst 'Second Crypto Winter'

South Korea's crypto market is struggling to recover from its recent slump. The five major won-based exchanges, Upbit, Bithumb, Coinone, Korbit, and Gopax, have seen a significant decline in trading volume, with the combined turnover at these exchanges falling by 54.6% year over year.

The first-half trading turnover for these exchanges reached $366.58 billion, representing a 16.9% drop from the same period last month. This has led to a shrinking market share for these exchanges against local stocks, with their daily average turnover accounting for just 1.59% of the KOSPI stock market's daily average in July.

Exchanges are responding by changing their business models to focus on partnerships with banks and brokerages, as well as offering institutional services. Korbit has been sold to Mirae Asset Consulting and plans to relaunch as DigitalX, expanding into stablecoins, real-world assets, tokenized securities, and custody.

Upbit is capitalizing on its advantage by waiving fees on six stablecoins, while Coinone is attempting to expand beyond token trading through a partnership with Korea Investment & Securities. However, not all exchanges have found easy solutions, with Bithumb's talks with potential partners having failed due to unresolved issues.

Gopax is prioritizing recovery over growth and has raised its won deposit rate to 1.50%, while still facing challenges in resolving its GoFi product losses of around 100 billion won.