South Korea’s cryptocurrency landscape is making waves, and it’s not just because of the digital assets themselves. A recent report from the Financial Supervisory Service (FSS) has unveiled that ‘whale’ investors—those with significant holdings—are dominating the trading volumes on the country’s major crypto exchanges. In fact, these whales account for over 90% of the trading activity, with Bithumb leading the pack in terms of concentration.
Whales in the Deep
The term ‘whale’ in the crypto world refers to individuals or entities that hold a substantial amount of cryptocurrency, often enough to influence market prices. In South Korea, these whales are not just swimming with the current—they’re shaping it. The FSS report highlights that a small number of large investors are responsible for the vast majority of trading activity on platforms like Bithumb, Upbit, and Coinone.
Bithumb, one of South Korea’s largest exchanges, has the highest concentration of whale activity. This finding isn’t entirely surprising, given Bithumb’s prominence in the market, but it does underscore the significant sway these investors hold. With their deep pockets, whales can maneuver the market in ways that smaller investors simply cannot.
The Impact on Retail Investors
For retail investors, this dominance by whales presents both challenges and opportunities. On one hand, the large volumes traded by whales can lead to increased liquidity, which is generally a positive development for any market. Greater liquidity can mean more stability, as it allows for easier buying and selling without causing significant price fluctuations.
However, the downside is that with whales calling the shots, retail investors might find themselves at a disadvantage. When a few players have the power to move markets, smaller investors can be caught off guard by sudden price changes. This can lead to increased volatility, particularly if whales decide to buy or sell large quantities of cryptocurrency in a short period.
Regulatory Concerns and Responses
The revelation of such concentrated trading activity has not gone unnoticed by regulators. South Korea’s financial authorities are already known for their vigilant approach to the crypto market, and this new data is likely to spur further scrutiny. The FSS has been working to ensure that the crypto market operates fairly and transparently, and the dominance of whale investors could be a cause for concern.
There are fears that such a concentration could lead to market manipulation, where whales might exploit their significant holdings to create artificial price movements. This possibility is something that regulators are keen to address, as they aim to protect the interests of all investors, not just the wealthiest ones.
A Balanced Perspective
Despite the potential challenges, it’s important to recognize the role that whale investors play in the broader cryptocurrency ecosystem. Their significant investments and trading volumes contribute to the overall growth and development of the market. Moreover, they often bring a level of expertise and insight that can be beneficial.
For instance, many whales are institutional investors or seasoned traders who can provide valuable liquidity and stability to the market. Their participation can also attract more attention and legitimacy to the crypto space, encouraging more traditional investors to consider digital assets as a viable investment option.
Looking Ahead
As the crypto market continues to evolve, the role of whale investors is likely to remain a topic of discussion. For South Korea, a country at the forefront of digital innovation, striking a balance between harnessing the benefits of whale activity and ensuring a fair playing field for all investors will be crucial.
The FSS is expected to continue its efforts to monitor and regulate the market, ensuring that the actions of a few don’t undermine the potential of the many. Meanwhile, exchanges like Bithumb may need to consider strategies to attract a more diverse range of investors, thereby reducing the outsized influence of whale traders.
In conclusion, while whales currently dominate South Korea’s crypto exchanges, their presence is a double-edged sword. They bring liquidity and expertise, but also the potential for market manipulation. As the country navigates these waters, the goal will be to foster a vibrant and inclusive crypto market that benefits everyone—big fish and small fry alike.
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
