Upbit, Bithumb flash profitability 'warning sign' as trading volumes shrink

Source

Korea Economic Daily

Summary

Trading volumes at Upbit and Bithumb, South Korea’s No. 1 and No. 2 crypto exchanges, have continued to fall, making a deterioration in profitability this year unavoidable, the report said.
With fee income accounting for 97–98% of revenue, the report cited declining crypto prices, weaker investor sentiment and a shift to rivals as factors weighing on profits.
Upbit decided to cut its 2025 cash dividend by 33.6% from the previous year to reflect lower trading volumes, while Bithumb faces added pressure on profitability due to fee discounts and potential sanctions linked to a mistaken Bitcoin payout incident, the report said.

Forecast Trend Report by Period

Fees account for most revenue

Crypto price slide dampens investment appetite

Trading volumes at Upbit and Bithumb, South Korea’s No. 1 and No. 2 crypto exchanges, have continued to decline. With investor sentiment toward cryptocurrencies showing little sign of reviving, analysts say a deterioration in profitability this year looks unavoidable.

According to CoinGecko on the 12th, Upbit’s 24-hour trading volume stood at $968 million as of 3 p.m. that day. The month-to-date average volume is $1.3059 billion, down by more than $500 million from last month’s $1.885 billion. Bithumb’s volume that day also came in at just $432 million. It has stayed below $500 million for six straight days since the 7th. Its average volume likewise fell to around $527 million this month from $826 million last month.

The pullback was largely driven by weakened risk appetite amid falling crypto prices. Bitcoin was priced at 102.04 million won that day, down 42.6% from its record high of 178.01 million won on Oct. 8 last year. In early last month, it briefly slid to the 92 million-won range. While it has regained the 100 million-won level this month, a clear upward momentum has yet to emerge. Another factor cited behind the volume decline is that some customers moved to Coinone and Korbit, which are waiving trading fees for the stablecoin USD Coin.

Given that fee income accounts for 97–98% of revenue at the two exchanges, many expect profit contraction to be unavoidable for the time being. Upbit also decided to scale back dividends to reflect the ongoing volume decline. At a regular shareholders’ meeting scheduled for the 31st, it plans to approve a 2025 cash dividend of 5,827 won per share, down 33.6% from the previous year’s 8,777 won.

Some also project that Bithumb’s earnings downturn could be even sharper. Various discount marketing efforts—such as its ongoing campaign offering 0.04% fee coupons and fee waivers introduced immediately after last month’s mistaken Bitcoin payout incident—could erode profitability beyond what the headline decline in trading volume implies. In addition, if the government imposes an administrative fine related to the incident, the burden could increase further. The Financial Supervisory Service recently wrapped up its on-site inspection of the case and plans to determine whether to impose sanctions after an internal review.

Reported by Jin-sung Kim jskim1028@hankyung.com

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