As Crypto Prices Surge, "Zero Trading Fees" Ignite Chicken Game Among Exchanges [Bitcoin Now]

Bitcoin Surges Over 20% in Ten Days, Tops KRW 100 Million

Coinone and Korbit Launch Zero-Fee Promotions to Capture Renewed Investor Sentiment

Exchanges Effectively Forego Revenue, Go All-In on Customer Acquisition

As investor sentiment toward virtual assets, led by Bitcoin, recovers, domestic cryptocurrency exchanges have launched a fierce competition to attract customers by offering zero-fee trading. They are prioritizing securing liquidity, to the extent of giving up transaction fees, which are effectively their only source of revenue. However, there are concerns that this may yield only short-term results.

According to the virtual asset industry on August 27, Coinone reduced its transaction fee rate for all coins to 0% from 11 a.m. the previous day until further notice. A Coinone representative explained that with this move, as well as recent exemptions on trading fees for personal open API transactions, every user and transaction type is now eligible for zero-fee trading. Coinone had previously lowered its transaction fee to 0.04% on August 3. This is lower than Upbit’s base rate of 0.05% and matches Bithumb’s rate (when using coupons) of 0.04%.

The reason Coinone lowered its transaction fees again in about three weeks is because its competitor began offering zero transaction fees. DigitalX, the operator of Korbit, announced on August 24 at 9 a.m. that it would make trading fees in the KRW market for all coins completely free for one year.

These measures appear to have been implemented to attract customers amid the recent rebound in virtual asset investor sentiment. According to CoinGecko, the price of one Bitcoin, which hovered at 63,017 dollars (about 87,108,400 won) on August 16, reached 78,390 dollars (108,670,000 won) as of 9 a.m. the previous day—a jump of approximately 24%. The Crypto Fear & Greed Index (as per Coinglass) also surpassed 61, indicating “greed,” on August 20 and briefly peaked at 73. In this context, “greed” signals a stage of heightened price volatility, increased trading volume, and a higher likelihood of a short-term market top.

Jinhyun Hong, a researcher at Samsung Securities, explained, "Low market share and the need to restore liquidity are behind the move to zero trading fees," adding, "It is a strategy to prioritize securing users and trading volume, even at the cost of transaction fees, which are the core revenue source." Transaction fees constitute nearly all revenue for virtual asset exchanges. Last year, Coinone recorded total revenue of 45.5 billion won, all coming from transaction fees. At Korbit, all but 1.2 million won out of 9.8 billion won in revenue was generated through fees. For market leaders Dunamu (Upbit’s operator) and Bithumb, fees also made up 97% to 98% of total revenue.

Exchanges are hoping to achieve a lock-in effect through these measures. KRW account opening (KYC verification) is required for cryptocurrency exchanges, so luring customers to deposit their funds with zero fees may lead to them staying even after the promotion ends, as moving funds to another exchange becomes inconvenient.

Another key reason both companies are aggressively pursuing this strategy is having strong backers: Mirae Asset Group and Korea Investment & Securities. In February, Mirae Asset Consulting completed the acquisition of 97.15% of Korbit, securing management control. For Coinone, Korea Investment & Securities and OKX Ventures each acquired a 20% stake in May. Subsequently, Mirae Asset Group participated in a third-party paid-in capital increase for DigitalX (Korbit’s operator) on August 13, injecting 50 billion won. Coinone is also leveraging synergy with Korea Investment & Securities; it has launched a service allowing users to trade domestic stocks from Korea Investment & Securities via the Coinone mobile application, and a joint event has been held to give away Samsung Electronics stock and more to customers trading stocks.

The impact of the zero-fee policy was immediate. Based on CoinGecko data, Korbit’s virtual asset trading volume surged from 1,773,372 dollars at 9 a.m. on August 24 (when free trading began) to 24,085,071 dollars by 2 p.m. on August 25—an increase of 1,258.2%. Coinone’s trading volume similarly jumped from 17.86 million dollars at 11 a.m. the previous day to 40.86 million dollars just one hour after zero fees were introduced, representing an increase of about 129%.

However, it remains uncertain whether keeping such promotions running for an extended period is always beneficial. While short-term gains are evident, many customers exit the exchange after an event concludes. According to data submitted by Min Byungdeok, a lawmaker on the National Policy Committee, to the Financial Supervisory Service, Korbit’s stablecoin market share soared from 2.6% to 22.6% during its USDC transaction fee waiver event from January 19 to April 13. However, in the two weeks after the event ended—April 13 to April 26—market share fell back to 3%, nearly returning to pre-event levels.

This content was produced with the assistance of AI translation services.