Altcoins’ share up 95% as BTC’s share dips to 5% of total trading volume, alarming South Korea’s banking association
The Korean Federation of Banks expressed concerns about the potential risks for banks that provide services to platforms that might be overexposed to altcoins.
Tue, 11 May 2021, 09:58 am UTC
Altcoin trading volumes across crypto exchanges in South Korea have significantly risen in recent months as Bitcoin’s (BTC) share dips to just around 5 percent. The marked increase in altcoin’s share has alarmed the Korean Federation of Banks as it expressed concern over the potential risks it may pose to financial institutions that have trading platforms as their clients.
The banking association has advised its member banks to determine the number of altcoins being offered by their crypto exchange clients, according to the Korea Herald. The move is meant to gauge an exchange’s trading capacity and aimed at reducing the potential risks for banks that provide services to platforms that might be overexposed to minor cryptos.
“One of the criteria that we recommend is the safety of digital assets and that can be measured by the number of digital coins on an exchange,” an official of the Korean Association of Banks said. “If an exchange deals with too many digital assets, it takes on more risks.”
South Korean traders have recently shifted from Bitcoin to altcoins resulting in a decline in BTC trading activity earlier this year and eventually led to the collapse of the Kimchi premium, according to Cointelegraph. Altcoins refers to cryptocurrencies other than Bitcoin, the largest digital currency by market capitalization.
The banking association’s recommendation came as altcoins transaction volumes across South Korean platforms rose to around 95 percent. Bithumb, Coinone, and Upbit, three of the country’s “Big Four” crypto exchanges, are offering over 150 altcoins on their platforms.
As of 3 p.m. on Saturday, the 24-hour trading volume of Bitcoin on South Korea’s largest crypto exchange was only 4.26 percent of the platform's total 24-hour trading volume. For comparison, BTC’s share on the Nasdaq-listed Coinbase for the same period was at 14.8 percent, showing South Korean investors’ preference for altcoins.
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