3 - 5 minute read
On April 12, 2023, Yuga Labs’ ERC-20 token ApeCoin (APE) went on a wild ride on Upbit, South Korea’s leading cryptocurrency exchange. The token briefly surged to $90.00, representing a 1,950% increase from its previous value. The rally was attributed to an overall retail frenzy and a constriction of trading routes on the exchange. However, most of the gains were wiped out in a sharp sell-off, leaving the token trading at $10.90 at the time of publication.
Upbit is considered to have a near-monopoly on South Korea’s cryptocurrency exchange landscape, with total assets of $8 billion and an 80% share of the domestic trading volume. However, regulatory authorities are reportedly considering measures to curb the size of the firm’s operations.
According to reports, the surge in APE’s value on Upbit was mainly due to the cryptocurrency exchange’s suspension of deposits and withdrawals of Ether (ETH) and ERC-20 tokens pending the completion of the Ethereum network’s Shanghai upgrade. Consequently, APE could not be sold or purchased into other ERC-20 tokens such as Tether (USDT) and ETH by Upbit’s users, leaving the BTC/APE trading pair as the only available option.
The rally in APE’s price raises concerns about market manipulation and its impact on the cryptocurrency market. Crypto price aggregators such as CoinMarketCap have flagged Upbit’s APE pricing as an “outlier” when computing aggregate prices.
Traders looking to invest in cryptocurrencies should exercise caution and due diligence when considering purchasing tokens on any exchange, especially one that has a near-monopoly on the domestic trading volume. The ApeCoin incident on Upbit illustrates the potential risks associated with investing in cryptocurrencies, which can be subject to manipulation and other market forces.
It is recommended that traders should diversify their investments across multiple exchanges and asset classes to mitigate risks associated with market volatility. Traders should also remain up-to-date with regulatory developments in the cryptocurrency space to keep abreast of any potential changes that may impact their investments.
The Bottom Line
The surge in ApeCoin’s value on Upbit underscores the volatility of the cryptocurrency market and the potential risks associated with investing in digital assets. Traders should be cautious when investing in cryptocurrencies and should diversify their investments across multiple exchanges and asset classes. While Upbit continues to dominate the South Korean cryptocurrency exchange landscape, regulatory authorities may introduce measures to curb the size of its operations, which could impact the market.