Upbit, owned by Dunamu, previously solidified its retail dominance through strict compliance and a real-name banking account system, holding over 70% of the domestic market share during the KRW trading peak in 2024-2025; meanwhile, Bithumb repeatedly adjusted its fee rates and listing strategies to compete for market share but has not been able to close the liquidity gap. Smaller exchanges like Korbit have repeatedly sold their own BTC and ETH to cover operational costs, indicating that the fee-dependent model has quickly exposed cash flow pressures after trading volumes halved.

Funds are shifting from pure spot trading to institutional channels and asset custody services in collaboration with securities firms, motivated by a desire to reduce reliance on retail volatility and to tap into regulated financial infrastructure; similar trends can be seen globally as exchanges increase subscription and custody services in response to pressure on trading income. In the South Korean market, however, local capital controls and derivatives restrictions are accelerating the flow of resources to traditional financial institutions.

This pattern is similar to Coinbase's transition to institutional custody and subscriptions after a decline in spot trading fees in the U.S. market, and is akin to the process of Japanese exchanges integrating with securities firms during periods of retail contraction; currently, the South Korean exchange industry is transitioning from competition based on trading volume to a focus on financial ecology and institutional services, with leading platforms strengthening their liquidity moat while smaller exchanges face risks of acquisition or exit.

Essentially, this represents capital concentration: low volatility and capital outflows lead to zero-sum competition for order flow, further amplifying the advantages of leading platforms through liquidity premiums. Rising regulatory compliance costs increase the survival threshold for smaller exchanges, ultimately pushing the market structure towards a few platforms with banking and brokerage resources.

ABAB News · Cognitive Laws

When liquidity is exhausted, market share concentrates in the deepest pools.
The fee model during low volatility is chronic bleeding.
As retail speculation retreats, institutional entry becomes the only way out.