Bithumb’s Bitcoin Blunder Erodes Market Share as Rivals Capitalize on Waning Trust
Bithumb’s market share slips to 24.8% after a bitcoin error, while Upbit, Coinone and Korbit expand their foothold.
South Korea’s fiercely competitive cryptocurrency exchange market has entered a new phase of consolidation after Bithumb’s high-profile bitcoin distribution error triggered a sharp erosion of investor confidence, shrinking its market share and strengthening its rivals.
Once hovering near the 30 percent mark, Bithumb’s share of trading among the country’s five won-denominated exchanges has fallen to 24.8 percent, according to CoinGecko data. The drop follows a Feb. 6 incident in which the exchange mistakenly credited users with 2,000 bitcoins each instead of distributing bitcoins worth 2,000 won, resulting in an erroneous payout totaling 620,000 bitcoins. The figure dwarfed Bithumb’s reported holdings of 42,800 bitcoins as of the third quarter last year, intensifying scrutiny over its internal controls and ledger management.
The immediate fallout was swift. From a 31.5 percent share recorded on Jan. 5, Bithumb slipped into the low-20 percent range the day after the misallocation. In an attempt to contain reputational damage, the exchange launched a weeklong zero-fee campaign beginning Feb. 9. The move briefly restored its share to 31.5 percent on Feb. 10, suggesting that pricing incentives could still mobilize short-term trading flows.
Yet the rebound proved fragile. Once the fee waiver ended on Feb. 16, volumes receded and Bithumb’s market share retreated to the mid-20 percent range. The episode reinforced a broader lesson in digital asset markets: temporary incentives can stimulate activity, but they rarely repair structural trust deficits.
Competitors were quick to capitalize. Upbit extended its dominance, commanding 58.4 percent of trading volume. Coinone, meanwhile, nearly doubled its footprint to 13 percent from 6.5 percent a month earlier. Korbit also recorded a dramatic uptick in activity, with trading volumes surging roughly 12.5 times compared to a month prior.
The spike at Korbit coincides with Mirae Asset Financial Group’s agreement to acquire a 92 percent stake in the exchange, fueling expectations of stronger governance and institutional credibility. At the same time, Upbit is pursuing a comprehensive share swap with Naver Financial, while Gopax has come under the ownership of global heavyweight Binance. Together, these developments suggest a domestic exchange landscape increasingly shaped by capital alliances and corporate consolidation.
Against this backdrop, Bithumb faces mounting pressure to demonstrate systemic reform rather than rely on tactical promotions. As one industry official noted, “Fee cuts can boost trading volumes in the short term, but without clear evidence of stronger internal controls and system stability, any recovery in market share is likely to be short-lived.”
For South Korea’s crypto sector, the episode underscores how operational missteps can rapidly alter competitive dynamics. In a market where trust is currency, technical errors carry consequences far beyond immediate financial losses. The real test for Bithumb now lies not in attracting volume, but in rebuilding confidence in an ecosystem where credibility is increasingly intertwined with scale, governance and institutional backing.
