South Korean crypto exchanges like Upbit and Bithumb are facing significant earnings pressure due to a sharp market decline that has reduced trading volumes. This follows a strong third quarter with record profits from surging crypto prices, but recent drops in Bitcoin below $95,000 and investor caution from global tensions are stalling recovery.
Trading volumes on Upbit and Bithumb fell to $1.88 billion daily average in early November, the lowest since January 2025.
Exchanges reported massive Q3 gains, with Upbit’s operating profits up 180% to 235.3 billion won.
Over 391 new tokens listed by top Korean exchanges in 2025, a 47% increase, aiming to boost engagement amid weak markets.
South Korean crypto exchanges earnings pressure mounts as trading volumes plummet amid market slump. Discover impacts on Upbit, Bithumb, and strategies for sustainability. Stay informed on crypto volatility—read now!
What is causing earnings pressure for South Korean crypto exchanges?
South Korean crypto exchanges are under intense earnings pressure primarily due to a dramatic decline in trading volumes following a market downturn. After a booming third quarter driven by rising digital asset prices, Bitcoin’s drop below $95,000—its lowest in six months—and heightened global uncertainties have led to investor hesitation, slashing daily trading activity to levels not seen earlier in the year. This volatility directly impacts revenue, as trading fees constitute nearly all of their income.
How has the recent market slump affected Upbit and Bithumb’s performance?
The recent market slump has severely impacted Upbit and Bithumb, with combined daily average trading volumes on the two platforms dipping to around $1.88 billion from November 1 through mid-month, according to data from CoinGecko. This marks the lowest point since the beginning of 2025, a sharp contrast to the $7.8 billion peak in January and even the $3-4 billion range seen in recent months. For context, Upbit’s operator, Dunamu, reported 235.3 billion won ($161.7 million) in operating profits for the third quarter, a 180% year-over-year increase, with revenue surging 104% to 385.9 billion won and net income quadrupling to 239 billion won. Bithumb fared similarly, with operating profits rising eightfold to 70.1 billion won, revenue up 184% to 196 billion won, and net income jumping 34-fold to 105.4 billion won. These gains were fueled by a rebound in digital asset prices, improved market sentiment from U.S. legislative advancements like the Guiding and Establishing National Innovation for United States Stablecoins Act (GENIUS Act), Ethereum’s rally, and expectations of a U.S. Federal Reserve interest rate cut. However, persistent U.S.-China trade tensions, fading hopes for imminent rate reductions, and a $100 million Ethereum hacking incident have eroded confidence, pushing the market into “extreme fear” territory as tracked by CoinMarketCap. Bitcoin’s slide—down 25% from its October 6 peak of $126,210—has dried up trading activity, raising fears of an emerging crypto winter. Industry officials note that without diversified revenue, exchanges remain highly vulnerable to such fluctuations. To counter this, platforms have accelerated token listings; APYWA reports that Korea’s top five exchanges—Korbit, Coinone, GOPAX, Upbit, and Bithumb—added about 391 new tokens from January 1 through mid-November 2025, a 47% rise from all of 2024, with the pace quickening in the second half. Despite these efforts, sideways market trading has kept volumes subdued, underscoring the need for regulatory reforms to enable business diversification, as highlighted by an industry official: “Without alternative revenue streams, exchanges will remain at the mercy of market volatility. While the phased approval of corporate participation in the crypto market is seen as a positive signal, long-term sustainability will require regulatory reforms that allow for greater business diversification.” Disclosures filed with the Financial Supervisory Services confirm these trends, painting a picture of short-term challenges amid broader market headwinds.
Frequently Asked Questions
What are the main revenue sources for South Korean crypto exchanges like Upbit and Bithumb?
Trading fees dominate revenue for South Korean crypto exchanges, accounting for 98.2% at Dunamu (Upbit) and 98.3% at Bithumb. This heavy reliance makes their earnings highly sensitive to fluctuations in trading volumes, as seen in the recent market decline that has pressured profitability despite strong third-quarter performances.
How might U.S. policy changes influence South Korean crypto exchange earnings?
U.S. policy developments, such as the approval of the GENIUS Act, can boost global market sentiment and indirectly support South Korean exchanges by increasing trading activity on assets like stablecoins. However, ongoing trade tensions with China and shifts in Federal Reserve rate expectations could counteract these benefits, leading to continued earnings volatility for platforms like Upbit and Bithumb.
Key Takeaways
- Market Volatility’s Direct Impact: Sharp declines in Bitcoin and Ethereum prices have halved trading volumes on major Korean exchanges, directly eroding fee-based revenues that form over 98% of their income.
- Record Q3 Gains Now at Risk: Upbit and Bithumb saw profits soar 180% and eightfold respectively in Q3 2025, but current slumps to $1.88 billion daily volumes threaten a reversal without new strategies.
- Diversification Urgently Needed: Listing 391 new tokens in 2025 shows proactive engagement efforts, but experts stress regulatory changes for alternative revenues to ensure long-term stability amid crypto winters.
Conclusion
South Korean crypto exchanges face mounting earnings pressure from declining trading volumes and market volatility, a stark shift from the third quarter’s record profits at platforms like Upbit and Bithumb. As global factors such as U.S.-China tensions and recent hacks continue to weigh on investor confidence, the sector’s heavy dependence on trading fees highlights the need for diversification. With accelerated token listings and calls for regulatory reforms, these exchanges are adapting to sustain operations. Looking ahead, a potential rebound in digital asset prices could restore momentum—investors should monitor Federal Reserve signals and legislative progress for signs of recovery.