South Korean virtual asset exchanges Korbit and Coinone have well over 100 listed altcoins that go an entire day without a single trade. Despite both exchanges playing the aggressive card of eliminating trading fees across all listed assets late last month, the increase in trading activity has been overwhelmingly concentrated in stablecoins, failing to generate meaningful altcoin trading volume, according to analysis.

As of 2 p.m. the previous day, roughly 80 of the approximately 190 virtual assets supported on Korbit (operated by DigitalX) had zero 24-hour trading volume, according to virtual asset industry sources on the 8th. On Coinone, approximately 130 of the roughly 360 supported assets saw no trades at all throughout the day.

Even excluding overlapping listings, the number of altcoins effectively in a state of suspended animation across the two exchanges is estimated to exceed 100. A significant number of assets also posted 24-hour trading volumes below 10,000 won (approximately $7.4).

The two largest exchanges, Upbit and Bithumb, had no altcoins with zero trading volume in their flagship Korean won markets. However, multiple such cases existed in their BTC-denominated markets.

Prices vary widely across exchanges — up to 20% gap

Coins that have gone long periods without trading remain frozen at their last executed price, meaning the same coin can show price differences of up to 20% across exchanges. For example, Coin A had 24-hour trading volume of 428.34 million won (approximately $318,000) on Upbit and 83.13 million won (approximately $62,000) on Bithumb as of 2:20 p.m. the previous day, but just 5,000 won (approximately $3.7) on Korbit and zero on Coinone.

The price of this coin showed little difference between Upbit at 131 won (approximately $0.097) and Bithumb at 129 won (approximately $0.096), but remained at 119 won (approximately $0.088) on Coinone and 105 won (approximately $0.078) on Korbit. The highest price was 19.8% above the lowest. On Korbit, the bid-ask spread for Coin A exceeded 20%, preventing trades from being executed, which caused sharp price swings whenever intermittent trading did occur.

Industry sources explain that since direct exchange-level trading involvement such as liquidity providers (LPs) is not permitted in the South Korean market, there are limited ways to supply liquidity to altcoins with no trading volume. Exchanges do run airdrops or deposit and trading events for newly listed virtual assets, but once these events end, it becomes difficult to sustain customer participation.

“However low the fees are, if liquidity is insufficient, the bid-ask spread widens and slippage occurs, potentially costing more than the fee savings,” one industry source noted. Another source added, “On exchanges with abundant liquidity, users can execute trades relatively easily at their desired time and price. That’s why liquidity is the key factor in choosing an exchange.”

Fee-free push only sparks stablecoin ‘flash’

Korbit and Coinone’s fee waiver events succeeded in temporarily boosting trading volume, but the composition was not what was expected. According to virtual asset data provider CoinGecko, Korbit’s total trading volume for the 11 days from the start of its fee-free event on the 24th of last month through the 3rd of this month reached $99.24 million, up 188.6% from the previous 11-day period ($34.38 million). Coinone also saw its total trading volume rise 85.8% to $423.63 million over the 9 days from the 26th of last month through the 3rd, compared with $227.91 million in the prior 9 days.

However, the increase was largely driven by stablecoins. According to data compiled by Tiger Research, a Web3-focused research firm, stablecoins accounted for an average of 71.2% of Korbit’s trading volume in the 11 days after the fee elimination, up from an average of 46.9% in the 11 days prior. Notably, the share exceeded 90% for five consecutive days from the first day of the fee-free period, peaking at 96.7%. The share on the day before the fee elimination was just 38.7%.

Coinone’s stablecoin share also rose from 51.8% the day before the fee waiver to 63.3% immediately after, averaging 53.4% over the subsequent 9 days. Over the roughly three-week period from August 12 to September 3, Korbit and Coinone were the only South Korean won-based exchanges where stablecoins accounted for more than half of total trading volume.

During the same period, stablecoins represented 131 billion won (approximately $97 million) of Korbit’s total trading volume of 152 billion won (approximately $113 million), or 86.0%. On Coinone, stablecoins accounted for 126 billion won (approximately $94 million) of the total 232 billion won (approximately $172 million), or 54.4%. By contrast, the figure was just 10.7% on Upbit, 14.0% on Bithumb, and 23.8% on Gopax.

The prevailing analysis is that stablecoin trading is typically conducted not for investment purposes but for currency conversion to move funds to overseas exchanges or wallet services, or for arbitrage. Yoon Seung-sik, head of research at Tiger Research, explained, “Stablecoins have extremely tight price gaps of less than 0.1% against overseas market prices, making arbitrage normally impossible. But the moment fees hit 0%, even a microscopic price difference of 0.01% becomes profitable.” He added, “Algorithmic bots freed from fee burdens engage in intensive, high-volume round-trip arbitrage around the clock, causing trading volume to explode.”

Market share goal remains elusive

South Korean won-based exchanges have attempted fee-free events multiple times in the past. It has been a desperate measure to alter a market landscape in which Upbit commands more than half of total trading volume. Given that trading fees account for roughly 99% of exchange revenue — effectively the only profit model — these moves amount to sacrificing short-term profitability to attract customers.

Bithumb has run fee-free events for set periods every year since 2023, at one point lifting its market share into the 30-40% range, but the temporary spike soon reverted to previous levels. In February, the exchange waived trading fees for a week following a Bitcoin overpayment incident, briefly pushing its share into the 30% range before it returned to the 20% range. Korbit also ran an event targeting Circle (USDC) traders in February, unusually reaching a 10% market share before falling back to single digits.

“Stablecoins appear to trade regardless of liquidity because price differences across exchanges are minimal,” said an industry source who requested anonymity. “Ultimately, exchanges with easier bank account integration or greater liquidity will inevitably enjoy higher market share.”

Yoon also noted, “Funds that flow in due to fee waivers are short-term liquidity chasing benefits. Since fees are the core revenue source for exchanges, the free policy cannot be made permanent, and the market structure reverts once the event ends.” He added, “Long-term market share is determined by UI/UX factors such as multi-tiered order books, low slippage, and account linkage convenience, rather than simply whether fees are charged.”

Meanwhile, some industry voices argue that South Korea should consider introducing liquidity providers similar to those on overseas exchanges to activate trading in unpopular altcoins and help smaller exchanges fill their liquidity gaps. “There is a need to gradually expand corporate trading and establish a foundation for professional liquidity providers and market makers to participate under clear standards and supervisory frameworks,” one source said.