South Korean XRP Trading Frenzy
The South Korean crypto trading mania appears to be back, driven by a surge in XRP tokens. Trading volumes for XRP spiked to billions of dollars on UpBit, Bithumb, and Korbit, three of Korea's top exchanges by volume, following the token's 26% rise in the past week.
XRP's Dominance on Major Exchanges
In the past 24 hours, XRP trading accounted for 37% of all volume on Bithumb, 18% of UpBit, and a staggering 50% of Korbit, according to data from CoinGecko and CoinMarketCap. These volumes were against the U.S. dollar on UpBit, and the Korean won on Bithumb and Korbit.
UpBit Leads Global XRP Trading Volumes
UpBit led global XRP trading volumes with over $790 million worth of tokens traded in the past 24 hours. In comparison, crypto exchange Binance traded a relatively smaller $720 million, per CoinGecko data.
South Korean Traders and Kimchi Premium
South Korean traders are notorious for fueling euphoric rallies on tokens. The Kimchi Premium originates from the region – where bitcoin prices on local exchanges can trade at a premium of as much as 30% compared to international counterparts, driven by local demand.
Wash Trading Concerns
Some of the volumes may be due to washing trading. In this manipulative technique, traders continually buy and sell the same asset to drive up volumes, creating a false impression of market activity.
XRP's Potential Commodity Classification
The interest in XRP arises from speculation that the token might be classified as a commodity by the U.S. Commodity Futures Trading Commission (CFTC) after the CFTC classified bitcoin and ether as commodities in a lawsuit against Binance. This could negatively impact the U.S. Securities and Exchange Commission's (SEC) case against Ripple, in which the regulator claims that XRP tokens are securities.
Ripple's Win Seen as Bullish for XRP
"The bullish impulse stems from Ripple's case vs. the SEC, where optimism for Ripple's win seems to be becoming more dominant," said Lewis Harland, portfolio manager at Decentral Park Capital, in a market update on Wednesday. "Maybe that Ripple win sets off a bullish impulse down the risk curve (alt season)," Harland added.