Revenue is cut! Korean crypto exchanges can't handle it anymore

Key points:Dunamu, the parent company of Upbit, South Korea's two major crypto exchanges, and Bithumb released financial reports for the first half of 2026 on the same day.

Revenue was almost at a standstill (down about 49% year on year), but profit performance was extremely uneven: Dunamu's net profit was 108.4 billion won (down 74.1% year on year).

Bithumb had a net loss of 108.7 billion won (profit of 55 billion won for the same period last year).

• The main reason for the decline: The total trading volume of South Korea's licensed Korean won exchanges fell 49.5% year-on-year in the second quarter, and fee revenue declined simultaneously with the overall contraction of the market.

• Profit difference: Dunamu has better cost control and remains profitable;

  Bithumb's losses included digital asset impairment and regulatory penalties, and the operating profit margin was less than 9%.

• Capital flow: Korean retail capital is shifting from the crypto market to AI and semiconductor concept stocks (Samsung Electronics, SK Hynix),

  In addition, a 22% crypto profits tax will be imposed in 2027, curbing the will to trade.

• IPO process: Dunamu received an investment of about 1.5 trillion won from Samsung affiliates and others, and cooperated with Naver Financial to promote the KRX listing;

  Bithumb is planning a three-phase IPO, targeting 2028, but current financial performance is under pressure.

• Industry reflection: The business model, which accounts for nearly 100% of transaction fees, shows strong cyclical attributes.

  The profit margin fell from 88% in 2021 to the current 14%, and the exchange's valuation logic faced open market torture and transformed into a key issue.

South Korea's two largest crypto exchanges simultaneously handed over a nearly symmetrical recession report card.

On August 14, Upbit's parent company Dunamu submitted its report for the first half of 2026 to the Korea Financial Supervisory Service (FSS) electronic disclosure system.

Bithumb's semi-annual report also surfaced on the same day. Looking at the two financial reports together, it's like two perspectives on the same recession.

Dunamu's consolidated revenue for the first half of the year was 408.1 billion won, a year-on-year decrease of 49.1%;

Operating profit was 111.5 billion won, down 79.7% year on year; net profit was 108.4 billion won, down 74.1% year on year.

Bithumb's revenue for the first half of the year was 168.8 billion won, down 48.7% year over year;

Operating profit of KRW 14.9 billion, down 83.4% year on year; net loss of KRW 108.7 billion, compared with net profit of KRW 55 billion for the same period last year.

Revenue declines were almost the same, all around 49%. However, there is a huge gap on the profit side.

Despite a sharp drop in profits, Dunamu still earned 108.4 billion won.

Bithumb directly turned into losses, and the amount of losses even exceeded Dunamu's net profit.

Same low tide, different water levels

The revenue of the two companies fell short at the same time.

The reason is simple: Five licensed Korean won exchanges (Upbit, Bithumb, Coinone, Korbit, Gopax)

The total trading volume for the second quarter fell 49.5% year over year to approximately US$146.4 billion.

The overall market has shrunk in half, and handling fee revenue has naturally shrunk in half.

But why is Dunamu still profitable and Bithumb losing money?

The difference is revenue structure and cost control.

Upbit's trading platform revenue for the first half of the year was approximately 395.5 billion won, accounting for 97% of total revenue.

Bithumb has a higher percentage, and almost 100% comes from transaction fees.

Both are highly dependent on transaction fees, but Dunamu has better control on the cost side.

Bithumb's losses include digital asset impairment losses and administrative expenses associated with regulatory penalties.

One more number explains the problem. At its peak in 2021, Dunamu left an operating profit of 88 won for every 100 won of revenue.

By the second quarter of 2026, this figure became 14 won.

The operating profit margin dropped from 88% to 14%. In five years, same company, same business model.

Bithumb's situation is more extreme. The operating profit for the first quarter was only 2.8 billion won, and the net loss was 86.9 billion won.

This includes a large amount of digital asset impairment and compliance rectification expenses.

Although the business level recovered in the second quarter, the first half of the year as a whole remained a net loss.

Where did the money go?

The decline in South Korea's crypto trading volume is directly linked to a structural shift in local capital flows.

In the first half of 2026, there was a clear shift in Korean retail capital from cryptocurrencies to AI and semiconductor concept stocks.

Samsung Electronics and SK Hynix have become new favorites among retail investors due to anticipated demand for AI memory chips.

Retail trading volume in the technology sector of the Korean stock market rose significantly during the same period.

For Korean retail investors, these two markets are alternatives rather than complementary.

With the same amount of spare money, either trading coins or stocks, the funds are switched back and forth between the two pools.

Further behind the scenes is that South Korea will officially introduce a 22% crypto asset gains tax in January 2027.

This expectation may already be stifling some investors' willingness to trade.

When profits are cut by one-fifth, the frequency of transactions and the use of leverage will naturally shrink.

Two IPO bets

At the same time that revenue is running out, both companies are moving forward with their listing plans.

Dunamu's side, May 2026, Samsung Group affiliated companies,

Asiana Bank and Hanwha Investment Securities purchased nearly one-fifth of Dunamu's shares at a price of approximately 1.5 trillion won (approximately US$1.07 billion).

Meanwhile, Dunamu is promoting a share exchange cooperation with Naver Financial.

Prepare for future IPOs on the Korea Stock Exchange (KRX). Naver is Korea's largest internet company,

The deal is seen as a key step in Dunamu's transformation from a crypto trading platform to a comprehensive fintech company.

On Bithumb's side, the company has drawn up a three-phase IPO roadmap with the goal of going public in 2028.

The current phase focuses on internal control rectification and preparation for KIFRS (Korea International Financial Reporting Standards) compliance.

However, based on current financial performance (net loss of 108.7 billion won in the first half of the year, operating profit margin of less than 9%),

Bithumb's listing valuation will be under tremendous pressure.

Both companies face the same embarrassing problem: how to explain to investors in the open market,

What kind of valuation multiples should be used for a company that can lose revenue and 80% of profits evaporate within half a year?

What exactly is an exchange?

This set of data has brought to the foreground an identity problem that has long been avoided in the crypto exchange industry.

When 97% of revenue comes from transaction fees, when fee revenue rises and falls exactly in sync with market trading volume,

When profit margins can drop from 88% to 14% in five years. The financial characteristics of this company,

It's more like a highly cyclical brokerage firm rather than an infrastructure company with stable cash flow.

Coinbase's valuation logic in US stocks also faced the same kind of torture.

In the 2024 crypto bull market, Coinbase's share of subscription and service revenue increased.

The market once thought it was transforming from a “transactional brokerage firm” to a “platform-based infrastructure.”

However, when trading volume declines, fee revenue is still the biggest variable that determines the direction of quarterly profit.

Dunamu attempted to answer that question by partnering with Naver.

If it can combine Naver's user traffic and payment scenarios with Upbit's transaction infrastructure,

The share of transaction fees in total revenue is likely to decline, making the company more like a technology company than a brokerage firm.

Bithumb's answer is currently unclear.

Its expansion in Southeast Asia (partnering with SSID to develop a Vietnam compliance platform) is one direction,

However, the effects of scale in overseas markets are far from evident.

In the crypto industry, exchanges are the most like traditional financial businesses, with license barriers.

There is a stable business model with real income and profit.

However, these two earnings reports from South Korea remind everyone:Businesses that are most like traditional finance are also most bound by cycles, just like traditional finance.

Money is printed during a bull market, bleeding is shed during a bear market, and there is no buffer zone in the middle.

For Dunamu and Bithumb, which are preparing for an IPO, the biggest challenge is probably not when the trading volume will return.

The question is how to convince investors in the open market that the next time the trading volume is cut, profits will not evaporate 80% again.

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