While South Korea's Bitcoin (BTC) transaction volume experienced a significant decline in the 2nd quarter, the liquidity of major exchanges in the United States increased, according to data from analysis company Kaiko.
Last week, the most Bitcoin sales were made on Binance and Bybit. However, the weekly trading volume of the four largest exchanges in South Korea, Upbit, Bithumb, Coinone, and Korbit, fell from an average of $35 billion in Q1 to $6 billion in early June. This comes after Korean Won (KRW) trading volume briefly surpassed USD trading volume in Q1.
The decline has been particularly strong at Upbit, which has seen its market share fall to 67%, its lowest level since February, relative to its main local rival Bithumb.
One explanation for the decline could be the softening of risk perception following higher-than-expected inflation in the US and the repricing of FED interest rate cut expectations. Upbit and Bithumb offer a larger number of large volume trading pairs compared to other exchanges. The top ten pairs by cumulative volume accounted for only 43% of Upbit's trading volume, compared to 70% at Coinbase and Kraken.
Meanwhile, the bid-ask spread on major US exchanges has narrowed significantly, indicating better liquidity for Bitcoin. The spread, which represents the difference between the highest buyer price and the lowest seller price, fell from 2.3 to 1.9 basis points on Bitstamp, from 1 over 0.3 basis points on Coinbase, and from 0.4 to 0.1 basis points on Kraken.
*This is not investment advice.