South Korea’s Biggest Cryptocurrency Exchange to Expand Into Europe, New Market
Bithumb, South Korea’s biggest cryptocurrency exchange alongside UPbit, will launch a cryptocurrency trading platform in the UK to target Europe-based investors.
Europe is Still a Market up for Grabs
Some of the oldest and most widely utilized cryptocurrency exchanges are headquartered in Europe, including Bitstamp. However, the majority of investors still rely on US-based cryptocurrency exchanges like Coinbase and Kraken to invest in the cryptocurrency market and according to CryptoCompare, a cryptocurrency market data provider, less than 6 percent of global bitcoin trades are processed in euro.
As seen in the infographic below, Bitstamp, the Luxembourg-based cryptocurrency exchange, primarily handles US dollar deposits and withdrawals and only a small portion of the user base of cryptocurrency exchanges in the US utilize euro or other currencies apart from the US dollar to process cryptocurrency trades.
Outside of Switzerland and Malta, no other European country has been able to appeal itself to the cryptocurrency sector, likely due to impractical policies and regulatory frameworks. The UK in particular had many issues with the cryptocurrency market as large-scale banks and financial institutions rejected services to local cryptocurrency exchanges and businesses.
Consequently, throughout the past few years, while the US, Japan, and South Korea evolved into major cryptocurrency exchange markets with more than 65 percent of the cryptocurrency market share, the entire continent of Europe has not been able to secure 7 percent of the market.
In an interview with ZDNet Korea, an executive at BTCKorea.com, the parent company of Bithumb, stated “Bithumb is currently preparing an expansion into the European market and the company is dedicated to expand its customer and user base.”
In South Korea, local cryptocurrency exchanges are provided with banking services from the country’s largest banks such as Shinhan Bank. The issue for Bithumb and other cryptocurrency exchanges that are eyeing an expansion into Europe could be obtaining partnerships with banks that are willing to provide virtual bank accounts and support the inflow of capital into the Bithumb trading platform.
What is the Advantage of Bithumb?
Bithumb is a proper cryptocurrency exchange based in South Korea which manages more than $6 billion in user funds. One of the main reasons behind the struggle of the European cryptocurrency market is the lack of proper cryptocurrency exchanges that process trades in local currencies like euro and the British pound.
Most cryptocurrency investors still rely on brokerage services or several US-based exchanges that process euro deposits and withdrawals like Kraken.
The expansion of Bithumb to the UK and Europe could result in a significant increase in trading activity, followed by a rise in interest toward the cryptocurrency sector by the mainstream.
Most recently, Japan-based bitFlyer expanded into the US with the approval from US regulators to operate in 41 states. At the time, bitFlyer USA COO Bartek Ringwelski said that bitFlyer will be able to provide support for institutional traders, which the US market lacks.
“Our expansion and upcoming cross-border trading addresses a huge unmet need in the U.S. by institutional traders looking to access large amounts of liquidity across multiple virtual currency markets,” said bitFlyer.
Bithumb will likely target a customer base of institutional investors considering that it has successfully attracted institutional investors in South Korea with offline exchanges.