"Yao Coin Manufacturer" Upbit is seizing pricing power in the cryptocurrency market

Author: Jaleel, BlockBeats

Editor: Jack, BlockBeats

Upbit is carefully laying out its holding and market-making strategies, seizing the opportunity of liquidity contraction among leading trading platforms to compete for pricing power of tokens in the entire cryptocurrency market.

On October 24, as Bitcoin's price surged by 15% overnight, driven by favorable ETF news and significant fluctuations in "big coin," many cryptocurrencies also saw impressive gains. Among them, MINA was the most eye-catching.

The day after Bitcoin broke the $35,000 mark, the price of MINA tokens on Binance surpassed $0.47, with a 24-hour increase of 13.27%. On the same day, the South Korean cryptocurrency exchange Upbit announced the listing of MINA, and its price subsequently surged significantly on the platform, briefly reaching $0.9648, creating a price difference of up to double compared to other mainstream exchanges like Binance.

Upon closer observation, we find that this is not the first time a significant price difference has appeared for tokens on Upbit. During the past few months of the crypto winter, this largest cryptocurrency exchange in South Korea seems to always be the best place for token prices to break through. Behind this phenomenon is Upbit's simple yet mature and effective tactics designed to seize the cryptocurrency market.

Listing on Upbit as a "Deterministic Benefit"

Since the second half of 2022, the cryptocurrency industry has faced a new wave of regulatory scrutiny, leading to a continuous depletion of market liquidity. Major trading platforms, led by Binance, are striving to survive by cutting costs and increasing revenue, massively laying off employees on one hand while seeking liquidity and cash flow through various channels on the other.

On October 20, Binance announced the launch of BSV 1-50x USDT perpetual contracts, surprising the market, especially since CZ had been very resolute when Binance delisted BSV four years ago. For example, previously, when news broke that DODO was being market-made by DWF Labs, its price surged over 50% within 24 hours, prompting Binance to quickly list DODO's 20x USDT perpetual contracts, which the community commented as a "forced move to earn liquidity and fees."

While other trading platforms focused on launching contracts, Upbit made moves in the spot trading pairs. After Upbit listed MINA, the price of MINA tokens saw significant increases across multiple trading platforms. Not just MINA, BlockBeats found that in recent months, whenever the South Korean cryptocurrency exchange Upbit announced the listing of a new digital currency, the prices of these currencies would show significant increases.

According to BlockBeats statistics, since June, all coins listed by Upbit have experienced noticeable price increases, and this trend has become increasingly evident over time. Especially since August, this trend has been further strengthened, with price increases gradually rising from 10% to 50%, detailed data is as follows:

On June 1, GRT saw a short-term increase to over $0.15 due to news of its listing on Upbit, with a maximum increase of nearly 15% within 15 minutes. On the 27th of the same month, BLUR was listed on Upbit and reached $0.4 on the same day, with a 24-hour increase of 13.35%. Subsequently, on July 28, after IMX was listed on Upbit, its price briefly exceeded $0.8, with a 24-hour increase of 9.7%.

Then on July 28, after IMX was listed on Upbit, its price briefly exceeded $0.8, with a 24-hour increase of 9.7%.

In August, this trend was further strengthened. On the 10th, after STG was listed on Upbit, its price increased by over 13% in a short time. On the 22nd, CYBER saw a short-term increase of over 8% due to its listing on Upbit, and it continued to rise from 7 PM the previous evening, accumulating a total increase of over 32%.

The GLMR listing event on September 25 further confirmed this trend. After Upbit announced the listing of GLMR, its price briefly broke $0.25, with a staggering 24-hour increase of 50.92%.

According to BlockBeats observations and statistics, after Upbit officially announces a new listing, the price of the coin generally sees the highest increase within two hours, after which it tends to decline, indicating that Upbit's official announcements have a greater short-term impact than mid-term impact. Tokens like MINA, which continue to rise after two hours, are exceptions.

Holding Amount and Strategic Accumulation as the Secret

Upbit's holding strategy has always been a focal point in the market. BlockBeats found that several coins that surged after being listed on Upbit had relatively low circulation, which presents a good opportunity for Upbit to compete for pricing power. Its holding amounts not only consistently exceed those of other major trading platforms but also frequently become the largest holding addresses for various tokens, thus earning it pricing power in the market.

A clear example is the case of CYBER. According to Scopescan monitoring, since Upbit listed CYBER on August 22, its wallet address has held approximately 3.6 million CYBER, valued at about $32.43 million.

This "show" between Upbit and DWF regarding CYBER officially kicked off on August 31. At that time, Upbit's wallet address held approximately 3.6 million CYBER, surpassing Binance to become the largest holder of CYBER, accounting for 33% of the token's circulating supply. At 3 PM that afternoon, Binance suspended CYBER token withdrawals due to insufficient ETH network balance.

On September 1, the price of CYBER on Upbit was over 45% higher than on Binance. On September 2, the event reached its peak, with CYBER's premium continuing to rise from 30% to 167%.

There are many reasons for CYBER's price increase, including the enthusiasm of South Koreans for trading and the push from DWF's arbitrage, but Upbit's control over a significant portion of the circulating supply is also a key reason.

Controlling "Shadow Addresses"

In fact, Upbit's attempt to become the "king of holdings" was hinted at as early as July. According to a joint investigation by several on-chain investigators, it was pointed out that the whale wallet holding Algorand's token ALGO is indeed Upbit. They listed the on-chain evidence in their investigation summary as follows:

From September 1, 2020, to March 22, 2022, the TIPER ring network/exchange allowed users to add on-chain text annotations in withdrawal transactions. Most of these annotations were in Korean and indicated that the origin was from Upbit. This suggests that the "TIPER ring" network is operated by South Korea's largest cryptocurrency exchange, Upbit.

Then, on September 9, 2020, Upbit released a notice announcing the listing of Algorand. The "TIPER ring" is also a collection of 11 accounts that are core to providing and flowing out of the Whale wallet to external exchanges/wallets.

This whale wallet is highly integrated with the TIPER ring, leading to the conclusion that this wallet is part of the TIPER ring. Therefore, it can be concluded that this ALGO whale wallet is controlled by Upbit.

BlockBeats learned that as of July, Upbit's wallet held a total of 687 million ALGO, while Binance held 521 million ALGO and Coinbase held 35 million ALGO, indicating that Upbit's holdings were higher than those of Binance and Coinbase.

Recently, despite STORJ's price continuing to rise over the past month, Upbit has not stopped its accumulation strategy. According to data monitored by Scopescan on October 9, Upbit had accumulated over 77 million STORJ, valued at about $40 million, making it the largest holding entity of STORJ. Scopescan shows the fund flow of Upbit collecting STORJ.

The above image shows the on-chain path of $STORJ transferred to Upbit; the below image shows the holding amounts of $STORJ on various trading platforms, source: Scopescan

According to monitoring data from Lookonchain, LOOM's price has recently skyrocketed, with a 24-hour increase of 42.48%. One of the significant reasons for this surge is that a wallet address suspected to be related to Upbit increased its holdings by 21.42 million LOOM (approximately $5.83 million) today, holding 653 million LOOM (approximately $181 million) on October 13, accounting for 50% of the total supply, making it the largest holding entity.

ZRX is similar, with its price rising 35% in the past 7 days, and a large amount of withdrawal activity was detected on-chain. Behind this, Upbit's deposit wallet address was the largest holding address for ZRX at that time, accounting for over 11% of its circulating supply.

Moreover, within just three days, multiple newly created accounts related to Upbit deposited a total of 1.3 billion MXT. This made Upbit's deposit wallet address once again the largest holding address.

Creating "Single Coins"

The largest holding entity has the greatest pricing power. In other words, after the token price has surged, when Upbit's holding amount starts to decrease, it marks the beginning of a price drop.

Take LOOM as an example. On October 13, after a wallet address related to Upbit increased its holdings by 21.42 million LOOM, the price began to soar, with a 24-hour increase of 42.48%. However, as the LOOM balance in Upbit decreased and other trading platforms' LOOM balances increased, the price could not be sustained.

A suspected Upbit wallet address transferred out 36 million LOOM, approximately $17.7 million, and Upbit also deposited LOOM into Binance and Bithumb more frequently within 48 hours, with over 120 transactions totaling about 19 million LOOM (valued at approximately $6.76 million). The price of LOOM subsequently fell below $0.12, dropping 35% in two days.

In contrast, when the token holdings shift from Upbit to Binance and other trading platforms, a significant drop begins. When other trading platforms close their withdrawal channels, it seems to be seen as a positive signal.

This afternoon, market data showed that since Upbit announced the listing of MINA, the prices of MINA tokens on mainstream CEX platforms have seen significant increases.

However, during the same period, the current price of MINA tokens on OKX was $0.7948, on Binance it was $0.6182, while on Upbit it reached $1.32, more than double the prices on mainstream CEX. This price difference may be due to the fact that MINA on Upbit primarily supports deposits on the Mina network and does not support deposits through other networks like BSC.

Additionally, the spot price of MINA tokens on OKX was also relatively high, with a premium of 28% over Binance's price, largely because it suspended the withdrawal channel for MINA for several minutes.

Coincidentally, during the CYBER incident in early September, Binance suspended CYBER token withdrawals due to insufficient ETH network balance, which may have been one of the significant reasons that propelled CYBER's premium to 167%.

DWF Really Likes Upbit

The connection between DWF and Upbit is becoming increasingly apparent, to some extent, it can be said that DWF and Upbit form a "small alliance."

Returning to the explosive CYBER incident, on August 21, Binance listed CYBER 1-20x USDT perpetual contracts, and then the South Korean cryptocurrency exchange Upbit listed CYBER on August 22. At that time, the main trading platforms in Korea only supported deposits and withdrawals of CYBER on Ethereum, leading to a surge in demand for CYBER in the Korean market and resulting in price differences. As a skilled market maker, the quick-witted DWF Labs seized the opportunity to engage in arbitrage.

On the day Upbit listed CYBER, according to Lookonchain monitoring, DWF Labs increased its holdings of 170,000 CYBER from Binance at an average price of $4.5, approximately $770,000, and it was calculated that the value of this increased CYBER rose to $1.26 million by August 30.

Subsequently, the price of CYBER on Upbit was driven up to $37, with a premium rate of 167%. CyberConnect issued an emergency proposal [CP-1] to unlock 10.88 million CYBER, equivalent to $300 million, an astonishing amount. In the community's panic, the official later claimed it was a data editing error, and the actual unlock amount was 1.08 million.

In this Cyber incident, individual investors were undoubtedly the biggest victims. A crypto KOL shared on social media that due to CYBER's astonishing price increase, he repeatedly shorted and went long, ultimately leading to a loss of a million.

After the incident, DWF faced significant controversy, and dissatisfaction from the community and peers reached new heights. At a forum during Token 2049, they were ridiculed and ostracized, with peers like GSR publicly stating that DWF "is not qualified to be on the same stage as institutions like Wintermute and OKX," and Wintermute CEO Evgeny Gaevoy supported this statement. However, DWF's arrogance clearly did not diminish, as co-founder Andrei Grachev responded to Wintermute, saying that they had started collaborating with their competitors and complained like children, calling them "bad actors."

On the other hand, with the fluctuations in CYBER's price, the interactions between DWF and Upbit have frequently become a focal point. The "small alliance" between DWF and Upbit was also reaffirmed in ORBS. BlockBeats reported that ORBS accounts for the largest share in DWF Labs' portfolio, while Upbit is the second-largest holder of ORBS, holding 1.63 billion ORBS, accounting for 20.59% of the total supply.

Moreover, looking back at the previously mentioned ALGO whale wallet, it was revealed to be controlled by Upbit, with Upbit's wallet holding a total of 687 million ALGO.

"True brothers share hardships," as a member of the "small alliance," DWF and Algorand's cooperation is also deepening, whether it's purchasing $50 million worth of ALGO tokens or establishing partnerships with the Algorand Foundation, indicating that DWF and Upbit's relationship is more than just a business one; they may have close ties.

In summary, Upbit's influence in the cryptocurrency market is becoming increasingly evident, and its holding strategy and impact on prices have become hot topics in the market. Every time a new coin is listed on Upbit, it seems to herald a wave of price increases.

After Upbit officially announces a new listing, the price of the coin generally sees the highest increase within two hours, after which it tends to decline, indicating that Upbit's official announcements have a greater short-term impact than mid-term impact. In addition to announcing new listings, Upbit's address operations also have a certain impact on coin prices. When Upbit's holding amount increases, the price generally rises; conversely, when it decreases, the price falls.

In terms of coin selection, Upbit's preference seems to be quite clear, favoring coins with lower market circulation. Considering the increasing correlation with DWF, the coins held by DWF are also worth observing.

At the same time, when Upbit's holding amount begins to decline, it indicates that the coin price is also about to drop. However, we see that yesterday's MINA, after two hours, continued to rise, making it hard to say this isn't a new strategy. BlockBeats reminds individual investors that when studying Upbit's price increase patterns, they should also consider changes from all parties, pursuing profits while deeply researching the market.