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| From left are the Upbit logo displayed in front of Dunamu headquarters and Bithumb's customer service center in Seoul. Yonhap |
By Lee Min-hyung
Korea's cryptocurrency exchanges reported drastic earnings falls in the first half of this year, hit hard by freezing investor sentiment amid global monetary tightening.
According to data from the Financial Supervisory Service (FSS), Dunamu reported 785 billion won in sales during the same period, down 61.3 percent from a year ago when the crypto investment boom reached its peak. Dunamu is the operator of the nation's largest crypto exchange, Upbit.
The firm's net profit came in at 172.8 billion won, down 88.2 percent from a year ago. This was a combination of a 206.8 billion won net profit in the first quarter and a 34 billion won net loss in the second.
The falling revenue is attributable to increasingly bearish investor sentiment in the crypto market after the U.S. Federal Reserve and global monetary authorities started their aggressive interest rate hikes. Even if most asset markets including stocks suffered big losses here and abroad, the crypto industry was hit particularly hard by the abrupt monetary policy shift due to the volatile nature of the crypto market.
"The declines in sales and operating profit were caused by the shrinking digital asset market amid global monetary tightening," a Dunamu official said. "The drop in net profit was due to a price fall of digital assets that we secured ― such as Bitcoin."
Bithumb, the nation's second-largest crypto exchange, also reported a double-digit decline in sales and operating profit. According to the firm, sales came in at 204.7 billion won in the first half of this year, a drop of 66.4 percent from a year earlier. Operating profit stood at 122.9 billion won, down 77 percent during the same period.
Industry officials said exchanges' earnings outlooks for the second half of 2022 remain murky amid the Fed's reiterated hawkish rhetoric.
"Most exchanges will continue to report dismal earnings performances until the Fed tones down its hawkish stance and shows gestures to slow down the pace of monetary tightening," an industry source said.
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