Why XRP Dominates South Korea’s Crypto Trading — And the Legal Loophole Behind It

In most global markets, Bitcoin and Ethereum are the default entry points for both institutions and retail traders. South Korea is the outlier. There, XRP has emerged as the de facto trading chip — a kind of high-speed rail for speculative capital that dominates volumes on the country’s largest crypto exchanges.

This is not simply a matter of retail preference. It’s the result of how South Korea’s regulatory and market structure channels speculative demand into a narrow set of spot assets. In that framework, XRP’s specific mix of liquidity, volatility, and community support lets it exploit a structural gap: domestic exchanges are effectively spot-only venues in a market that still wants leverage-like exposure.

How XRP Overtook Bitcoin and Ethereum in Korea

Data from South Korea’s largest centralized exchanges shows a clear pattern: when trading activity spikes, domestic users systematically gravitate toward XRP rather than Bitcoin or Ethereum.

Upbit, operated by Dunamu and by far the dominant exchange in the country, has listed XRP as its most-traded asset for the year, ahead of both BTC and ETH despite their far larger global market capitalizations. That makes XRP the primary vehicle through which Korean retail expresses short-term views on the crypto market.

The trend is not isolated to a single platform. On Bithumb, the country’s second-largest exchange, market data places the XRP/KRW pair as the second-most traded pair by volume share, sitting only behind the KRW pair against USDT, the leading stablecoin. In other words, aside from cash-like stablecoins, XRP is the main asset Koreans are actually trading.

This fits into a broader structural characteristic of South Korea’s crypto ecosystem: altcoins collectively account for roughly 70–80% of trading volume on domestic centralized exchanges, far above a global average closer to 50%. In that altcoin-heavy environment, XRP has managed to secure a central, quasi-benchmark role.

While large global investors often default to Bitcoin as a store of value, the South Korean market has evolved into a high-velocity, short-horizon arena where the most important attribute is not long-term narrative, but tradability under stress. XRP has become the asset that local traders reach for when the market moves quickly — and the data suggests they do so consistently.

Spot‑Only Exchanges and the “Legal Loophole”

At the heart of XRP’s dominance lies a structural constraint in South Korea’s crypto market architecture: domestic exchanges are overwhelmingly limited to spot trading.

According to research cited from Tiger Research, significantly more South Korean capital flows to offshore exchanges than remains on domestic platforms. A key driver of that outflow is the pursuit of derivatives — leveraged futures and other instruments that are not widely available within South Korea’s regulated exchange framework.

This creates a two-tier system:

• Traders who want direct leverage or complex derivatives migrate to foreign venues.
• Traders who remain onshore must operate within a spot-only or spot-dominant environment.

The “loophole” is not a hidden legal trick by XRP itself, but a structural gap created by regulation: speculative demand for leverage has nowhere to go domestically except into spot assets that can mimic leveraged exposure through high volatility and deep liquidity. Within this constraint, XRP becomes a preferred instrument because it offers sufficient price movement to generate meaningful short-term gains, while still maintaining order book depth and tight spreads that enable rapid entry and exit.

In effect, the absence of local derivatives turns volatility into a substitute for leverage. XRP’s role, then, is to provide leverage-like characteristics within the boundaries of what domestic exchanges are allowed to offer. That makes it functionally a “legal” high-beta tool in a market that has been structurally pushed away from synthetic leverage.

Volatility as a Substitute for Leverage

For traders confined to spot markets, the question becomes: how do you achieve outsized returns without the formal leverage available on offshore platforms?

The answer in South Korea has been to concentrate trading into assets with:

• High volatility (high beta to the broader crypto market), enabling large percentage moves over short windows.
• High liquidity, ensuring those moves can be traded at size without excessive slippage.

XRP fits that profile. It has historically shown enough price movement to offer speculative upside, yet it maintains deep order books and relatively tight spreads on major Korean exchanges. That balance positions it in a “sweet spot” — volatile enough to feel like leverage, but liquid enough to be tradeable even during rapid market swings.

This is especially important at critical liquidity windows. Upbit, for example, identifies 9 AM as its busiest trading hour, when the workday begins and a surge of retail capital hits the market. During this morning rush, traders need an asset that can reliably absorb high-order flow without freezing or fragmenting liquidity. XRP has emerged as the asset that consistently fulfills this role.

As a result, many Korean traders now treat XRP less as a long-term thesis and more as infrastructural plumbing — a default rotation pair used to move in and out of risk quickly. It behaves more like a high-speed conduit for capital than a traditional “investment” in the way Bitcoin might function as a store-of-value bet.

Psychology reinforces the structural effect. Many domestic traders are described as having missed the earliest, exponential phases of Bitcoin and Ethereum’s growth. In search of “catch-up” opportunities, they have turned heavily toward altcoins, including XRP, where they perceive a greater chance of replicating earlier life-changing gains. That preference for high-growth, high-beta assets has historically seen Korean retail driving euphoric rallies in smaller, more volatile tokens.

Liquidity, Utility, and the 9 a.m. Trading Rush

South Korea’s market infrastructure is optimized around quick decision cycles rather than long-horizon accumulation. Major exchanges like Upbit are structured primarily around spot pairs against the South Korean won (KRW), which shapes how traders express views.

When sentiment shifts — whether bullish or bearish — domestic traders tend not to park capital in illiquid or obscure assets. Instead, they rotate into instruments that they know will remain tradeable even under heavy load. XRP has become that “ergonomic” choice: a familiar tool that almost every active trader on the platform knows how to use and can reliably execute against.

This pattern is especially visible at Upbit’s 9 AM peak. As retail users log in and reposition for the day, they require an asset that:

• Can absorb concentrated bursts of volume.
• Offers tight spreads, minimizing cost in high-frequency decision-making.
• Retains functional order books even during rapid moves across the broader market.

XRP consistently fills this role. Even beyond its price chart, its utility as a rotation pair is what keeps it at the center of Korea’s trading stack. It is the asset that traders use to toggle their risk exposure, not merely a speculative bet in isolation.

This difference between conviction and utility is crucial. Bitcoin might command stronger long-term conviction globally as a macro store-of-value, but in a fast-moving, intraday retail environment — with a heavy focus on KRW spot markets and a structural absence of local derivatives — the best asset is the one that can be traded most efficiently when everyone is online at the same time. In South Korea, that has become XRP.

Inside Korea’s “XRP Army”: Community as a Market Moat

Market mechanics alone do not fully explain XRP’s entrenched role. Community dynamics have reinforced and deepened its dominance.

Ripple’s Senior Manager of Ecosystem Growth, Tatsuya Kohrogi, has publicly described the South Korean XRP community as “next level,” highlighting its unusually intense engagement compared to other major regions. This is supported by the sheer density of crypto participation in the country: reports indicate more than 7 million South Koreans — roughly 15% of the national population — are registered on local exchanges.

Within that dense user base, XRP has developed its own “XRP Army” culture. This community does not just trade the token; it actively defends its liquidity and presence on domestic platforms. Crypto market analyst Dom has highlighted instances where buying power on Upbit has exceeded that of global players such as Coinbase and Binance, underscoring the ability of Korean XRP traders to move price and volume meaningfully on their own.

This persistent, coordinated retail participation helped fuel XRP’s price performance over the previous year, with local flows repeatedly aligning in its favor. Community intensity, then, acts as a kind of moat: even if other assets might theoretically compete on volatility or liquidity, few can match the combination of structural utility and embedded local fandom that XRP currently enjoys in South Korea.

The result is a feedback loop. High engagement drives volume and liquidity, which makes XRP more attractive as a trading tool. That, in turn, incentivizes more traders to adopt it as their default rotation asset, further concentrating activity.

From Retail Favorite to Institutional Infrastructure

What began as a retail-driven speculative habit is now intersecting with a shift in global and local institutional attitudes toward XRP.

For years, XRP carried a significant overhang from US regulatory uncertainty, particularly the US Securities and Exchange Commission’s lawsuit against Ripple. That cloud has meaningfully lifted: in August 2025, the SEC and Ripple agreed to end their legal battle by mutually abandoning appeals, concluding a five-year dispute. In the aftermath, traditional financial firms — including Franklin Templeton — have moved to announce XRP-focused exchange-traded funds, signaling an improvement in the asset’s perceived legitimacy.

This global rehabilitation is now being mirrored in South Korea’s institutional plumbing. Domestic infrastructure is starting to adapt to the reality that XRP is not just another altcoin locally; it is the asset that dominates retail turnover.

BDACS, one of only four licensed crypto custodians in South Korea, is actively positioning itself at this intersection. The firm has collaborated with Ripple to provide digital asset custody for tokenized securities and stablecoins such as Ripple USD (RLUSD), as well as XRP itself. By focusing on custody solutions for the asset that already captures the most retail flow, BDACS and similar institutions are effectively validating the market’s organic choice.

This marks a narrative shift. XRP’s role in South Korea is evolving from a purely speculative vehicle engineered by structural loopholes — a high-beta substitute for missing derivatives — toward a more formalized, institutionalized component of the financial stack. While its dominance remains rooted in retail behavior and spot-only constraints, regulated custodians and global ETF products are beginning to build around that reality rather than against it.

For traders and analysts watching Korea, the implications are clear: XRP’s position in the market is no longer just a temporary quirk of retail enthusiasm. It is being codified in infrastructure, supported by a regulatory environment that restricts leverage and a trading culture that rewards volatility and liquidity. Unless those structural conditions change, XRP is likely to remain the core instrument through which South Korean markets express speculative risk.