Upbit and Bithumb see drop in digital asset value despite higher coin holdings

Major South Korean cryptocurrency exchanges Upbit and Bithumb saw a significant decline in the total valuation of user-held digital assets during the first half of the year, despite an increase in the actual quantity of coins held. According to data from the Financial Supervisory Service, the valuation of assets held by Dunamu (Upbit's operator) fell by 32.6% to approximately 41.9 trillion won, while Bithumb's user-held asset value dropped by roughly 32.7%.

While the market value decreased due to falling cryptocurrency prices, the volume of major assets like Bitcoin and Ethereum held by users at both exchanges increased. This shift suggests a move from active trading to long-term holding. Analysts suggest this trend may be driven by recent high-profile hacking incidents in decentralized finance (DeFi) protocols, leading investors to move assets to centralized exchanges for perceived better security.

Additionally, cash deposits for trading at both exchanges fell significantly. Upbit's user deposits decreased by 36% and Bithumb's by 35% compared to the end of last year. This decline in cash liquidity, paired with rising coin quantities, indicates reduced short-term trading activity and a preference for asset accumulation amidst lower market volatility.