Upbit, Bithumb Post Revenue Halves
The industry slump is prolonging as Upbit and Bithumb, the first and second largest virtual asset exchanges in South Korea, saw their revenues for the first half of this year cut in half side by side. There is an analysis that to achieve a rebound in the second half, the recovery of virtual asset tr
South Korea's virtual asset exchanges Upbit and Bithumb, the top two platforms, reported a 50% drop in revenue for the first half of the year, according to industry figures released on August 19. The decline stemmed from a broader market slump, with Bitcoin's price plummeting below $60,000 during the period. Analysts believe a rebound in the second half will depend on increased virtual asset trading volume and market prices, as well as the creation of institutional conditions like the passage of the Framework Act on Digital Assets.
Upbit's operator, Dunamu, recorded a consolidated revenue of 408.1 billion won ($313.92 million) in the first half of the year, a drop of 49.1% compared to 801.9 billion won ($616.85 million) in the same period last year. Operating profit fell sharply by 79.7% to 111.5 billion won ($85.77 million), while net profit declined 74.1% to 108.4 billion won ($83.38 million).
Bithumb experienced a 48.7% revenue decline to 168.8 billion won ($129.85 million), with operating profit down 83.4% to 14.9 billion won ($11.46 million) and a net loss. The exchanges' transaction volumes and the valuation of virtual assets held by them both plummeted. Dunamu's holdings decreased by 39.6% to 1.3779 trillion won ($1.06 billion), and Bithumb's holdings dropped by 30.5% to 194.09895 billion won ($149.31 million).
The decline was attributed to the overall slump in virtual assets, with Bitcoin's all-time high of $126,000 in October last year falling to below $60,000. Additionally, domestic and foreign investment funds migrated to AI and semiconductor stocks, causing a parallel decline in investment sentiment towards virtual assets.
Coinbase, an overseas exchange, saw a 25% drop in first-half revenue to $2.63 billion compared to $3.53 billion in the previous year. However, it was noted that the impact was mitigated by diversifying profit sources, with subscription and service revenue excluding transaction fees accounting for nearly half of the net revenue in the second quarter. The prolonged institutional vacuum and reliance on transaction fees for revenue also contributed to the performance deterioration.
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