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| gettyimagesbank |
By Lee Min-hyung
Most Korean crypto exchanges suffered deficits in the second quarter of this year, hit hard by a fall in trading commission revenues amid a prolonged bearish market sentiment.
Dunamu, the operator of the nation's dominant exchange, Upbit, is the only company that generated gains during the same period. The deficits of other exchange operators reveal that the crypto market remains trapped in a protracted slump in the aftermath of a global monetary tightening cycle.
Bithumb Korea, the No. 2 crypto exchange here, however, failed to extend its winning streak between April and June and reported an operating loss of 3.4 billion won ($2.53 million) amid a drastic fall in trading volume. The second-largest exchange operator generated an operating profit of 38.4 billion won a year earlier.
The earnings fall was triggered by frozen investor sentiment after the U.S. Federal Reserve and the Bank of Korea stepped up hawkish monetary rhetoric last year.
Others categorized in the so-called top five exchanges here suffered similar earnings shocks during the same period.
Coinone also swung to a deficit with a net loss of 880 million won in the first half. Its sales also halved to 11.2 billion won from a year ago.
Korbit and GOPAX, which do not share their quarterly earnings reports, are also widely forecast to have continued their losing streaks in the first half even after they suffered losses in 2022. Korbit reported an operating loss of 35.8 billion won last year, and Streami, the GOPAX operator, suffered a 76.5 billion won operating loss during the same period.
This is a disappointing twist from 2021, when the market reached its peak on post-pandemic low interest rates. The combined net profit of Upbit and Bithumb topped 2.8 trillion won that year, surpassing that of Korea's top two securities firms.
Even if Dunamu reported an operating profit of 211.9 billion won in the first quarter, this was a drop of 26.3 percent from a year earlier. The firm's stock price has been gradually declining for the past year for a similar reason. Dunamu shares more than halved between Aug. 23, 2022, and Aug. 17, 2023, according to data from Stockplus Unlisted.
Industry officials were pessimistic about a near-term rebound in market sentiment.
"Investor sentiment is unlikely to take an abrupt turn for the better in the latter half, as global monetary authorities are widely expected to maintain the high-interest rate policy stance at least until the end of 2023," an official at a local exchange said.
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