The Long Tail Phenomenon of the Korean Exchange: Why is the Coin Listing Effect So Prominent?

85% of funds are concentrated in altcoins, with structural barriers creating a unique liquidity bonus for new listings in Korean won.

Written by: Heechang Kang

Compiled by: Luffy, Foresight News

The Korean crypto market is completely opposite to the global mainstream pattern.

The above image intuitively shows this abnormal market characteristic. In a recent statistical period, long-tail small coins accounted for 58% of Upbit's and 52% of Bithumb's trading volume; Bitcoin only accounted for 9% of the Korean market's transactions. In contrast, Bitcoin's trading volume on Binance and Coinbase accounted for 23% and 47%, respectively. The Korean spot market remains the second largest in the world, with an average weekly transaction volume of about $26 billion, accounting for 30% of the global spot total. Such a large market has developed a funding preference that is completely opposite to the global trend, which is not a coincidence in a niche market.

As early as the first quarter of 2024, the trading volume of Korean won pairs reached $456 billion in a single quarter, surpassing the US dollar to become the leading fiat currency in the crypto market. However, only 15% of this massive capital flowed into Bitcoin and Ethereum, while the remaining 85% surged into altcoins and newly listed tokens, creating a unique liquidity bonus for new listings in the Korean won market.

The strong demand for long-tail assets directly gave rise to the two major domestic exchanges. Upbit, riding this wave, entered the top five in global trading volume, capturing over 80% of the Korean market share, which later fell back to 72%; Upbit and Bithumb together monopolized nearly 96% of Korea's trading volume.

The dual oligopoly enjoys a massive retail investor base. By early 2025, the number of registered users on exchanges exceeded 16.2 million, surpassing the 14.5 million shareholders in the Korean stock market. Regulatory data shows that by the end of 2024, the number of verified traders reached 9.7 million, with a six-month growth rate of 25%, and the scale of users' crypto asset holdings doubled to $77.5 billion. The age structure of investors is concentrated in the 30s (29%) and 40s (27%); 66% of users hold less than 500,000 won. A large number of small, active retail investors form the core group for trading long-tail small coins.

85% of Trading Volume Concentrated in Altcoins

Global mainstream exchanges focus on BTC and ETH as core trading assets, while the Korean market is completely inverted: 85% of local trading volume flows into altcoins, with Bitcoin at only 9% and Ethereum at 6%. This unique funding preference stems from four structural constraints that limit the legitimate investment channels for Korean risk capital:

• Lack of compliant derivatives. There are no legal crypto futures, options, or leveraged products in South Korea. The demand for overseas traders to profit through derivatives can only be met locally by relying on the volatile spot altcoins, making small coins a de facto "natural leverage tool" for retail investors.
• Capital controls isolate overseas institutions. The mandatory real-name local bank account requirement and rules that only support won deposits and withdrawals directly isolate overseas market makers and cross-market arbitrage teams. Market pricing is entirely led by local retail investors, lacking professional institutions to hedge sentiment; once a market trend forms, it tends to amplify.
• Narrow listing pool on exchanges. Upbit only supports won trading, listing about 324 coins; Binance and Bitget list over 700 coins. Local funds can only be diverted to fewer targets, and each newly listed token can attract far more funding attention than on global platforms.
• A market culture dominated by retail investors. There are almost no institutional participants, the speed of digital product adoption is rapid, and hot trends spread quickly among the public. Funds tend to flock to popular new coins, creating a unified buying wave; the US market relies on ETFs and corporate funds to stabilize holdings of BTC and ETH, while Korea has long lacked institutional buying pressure.

New Listings Drive Price Increases: The Liquidity Loop of a Closed Market

Every new coin listed on Upbit and Bithumb triggers a surge in prices. The trading volume of PRL surged by 5500% within 24 hours of its listing, SLX doubled in price, HYPER increased by over 100%, AZTEC rose by 82%, and SKR's trading volume skyrocketed by 700%, with a price increase of 62%. New listings have also become a competitive strategy for the two exchanges to capture market share: in September 2025, Bithumb's share rose to 46%, prompting Upbit to list 7 new coins within 10 days in response.

Day trading also follows a fixed pattern, known in the industry as "the 9 AM market." Every day at 9 AM Korean Standard Time, multiple unknown altcoins collectively surge, with retail investors betting on the next popular coin; the trigger points for these market movements are not industry news but purely the unified trading behavior of retail investors.

Even when deposit and withdrawal channels are frozen, the enthusiasm for speculation remains undiminished. In November 2025, Upbit suffered a hacker attack and suspended deposits and withdrawals, but retail funds continued to speculate on tokens like ORCA and RAY on the platform, a phenomenon referred to as "net-style price increases," with the platform earning $340,650 in fees in a single day. In February 2026, ZKsync surged nearly 970% during the platform's maintenance period, triggering regulatory investigations, further confirming the speculative loop of a closed market.

Capital controls isolating overseas arbitrage are the core reason why price increases can continue, with a hallmark phenomenon being the "kimchi premium": the average remains at 2%-3%, peaking at 10.88% in March 2024. However, the market has two sides; by the end of 2025, the premium turned negative, and the short-term premium effect brought by new listings significantly weakened.

The Fading Heat: The Lifecycle of New Listing Bonuses

The above image shows the pattern of fading enthusiasm for new listings. The liquidity of all tokens is highly concentrated in the initial listing period. The median liquidity of newly listed tokens on Upbit tends to lose most of its value within 10-15 weeks after listing; however, it does not completely drop to zero, forming a stable bottom liquidity. At 51 weeks post-listing, the median liquidity of surviving tokens stabilizes at $11.3 million, second only to Binance's $25.6 million, and about five times that of Coinbase ($2.3 million) and Bithumb ($2.2 million).

However, the retention performance of tokens is not optimistic. After 51 weeks of listing, only 42.7% of Upbit's and 40.5% of Bithumb's tokens maintain trading volumes above 10% of their peak at listing; for Binance, this ratio is 43.6%, while Coinbase reaches as high as 63.8%. Coinbase's newly listed tokens start with lower initial enthusiasm and stable trends, making it easier to maintain the 10% liquidity threshold; Korean tokens see massive trading volumes upon listing, and even if they retain 10%, the absolute volume remains considerable. Overall, nearly 60% of newly listed tokens in Korea lose most of their initial capital within a year.

Objectively speaking, the Korean market has a profound yet selective memory. The first few months after a new listing see severe eliminations, with only a few tokens able to settle long-term large-scale liquidity. New listings in the Korean won are not a permanent stable flow but a one-year "screening assessment," ultimately allowing only about a handful of tokens to achieve stable liquidity in the tens of millions.