Upbit and Bithumb Report Strong Profits Despite Market Weakness

South Korean cryptocurrency exchanges Upbit and Bithumb report strong Q3 profits despite a decline in trading volumes due to a weakened market and reduced transaction fee revenue.

This trend underscores the vulnerability of exchanges reliant on transaction fees, highlighting the need for diversification amid market volatility and potential regulatory changes affecting crypto trading in South Korea.

Upbit’s Profit Surges 180% Amid Declining Volumes

Upbit’s operator, Dunamu, experienced a year-on-year increase of 180% in its operating profit for Q3, bringing it to 235.3 billion won. Bithumb also reported robust profits despite a declining trading volume. Transaction fees continue to make up 98% of revenue for both entities.

Despite adding new tokens, trading activities remain limited. The recent fall of Bitcoin by approximately 25% accentuated the exchanges’ challenges, amplifying the impact of a weakened market on profitability.

“Without regulatory reform, South Korea risks becoming a relic in the global digital finance arena.” — Financial Services Commission (FSC), South Korea

Bitcoin’s Price Decline Mirrors Past Crypto Winters

Did you know? The current decline in Bitcoin mirrors patterns during the 2022–2023 crypto winter, a period marked by volume compression and exchange struggles despite global efforts for growth.

According to CoinMarketCap, Bitcoin’s current price stands at $91,967.89, with a 24-hour trading volume reporting a notable change of 50.59%. The cryptocurrency exhibits a downward trajectory, losing approximately 19.00% over the last 90 days, contributing to market hesitation. Bitcoin’s total market cap is $1,834.77 billion with a market dominance of 58.86%.

Coincu research insights suggest that without diversification in revenue streams, exchanges might persist in their vulnerability to market fluctuations. Efforts to shift beyond reliance on transaction fees are essential for sustainable industry growth in the regulatory environment.