Author: Xiao Bing
South Korea's two largest cryptocurrency exchanges simultaneously submitted strikingly symmetrical reports of decline.
On August 14, Dunamu, the parent company of Upbit, submitted its 2026 semi-annual report to the Financial Supervisory Service's (FSS) electronic disclosure system. On the same day, Bithumb's semi-annual report also surfaced. Placed side by side, the two financial statements look like two perspectives of the same receding tide.
Dunamu's consolidated operating 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, a year-on-year decrease of 79.7%; net profit was 108.4 billion won, a year-on-year decrease of 74.1%.
Bithumb's operating revenue for the first half was 168.8 billion won, a year-on-year decrease of 48.7%; operating profit was 14.9 billion won, a year-on-year decrease of 83.4%; net loss was 108.7 billion won, compared to a net profit of 55 billion won in the same period last year.
The revenue declines were almost identical, around 49%. But the gap on the profit side is stark. While Dunamu's profits plummeted, it still earned 108.4 billion won. Bithumb swung directly into a loss, with the loss amount even exceeding Dunamu's net profit.
The Same Receding Tide, Different Water Levels
The synchronized halving of income for both companies has a simple reason: the combined trading volume of South Korea's five licensed won-based exchanges (Upbit, Bithumb, Coinone, Korbit, Gopax) in the second quarter fell 49.5% year-on-year to approximately $1.464 trillion. With the overall market shrinking by half, transaction fee income naturally shrinks by half.
But why can Dunamu still be profitable, while Bithumb posts a loss?
The difference lies in revenue structure and cost control. Upbit's trading platform revenue in the first half was about 395.5 billion won, accounting for 97% of total revenue. Bithumb's ratio is even higher, nearly 100% from transaction fees. Both are highly dependent on transaction fees, but Dunamu has better control over costs. Bithumb's loss includes impairment losses on digital assets and administrative expenses related to regulatory penalties.
Another figure illustrates the point. During Dunamu's peak in 2021, it retained 88 won in operating profit for every 100 won of revenue. By the second quarter of 2026, this number had become 14 won. The operating profit margin dropped from 88% to 14% in five years—the same company, the same business model.
Bithumb's situation is more extreme. In the first quarter, operating profit was only 2.8 billion won, with a net loss of 86.9 billion won, including significant digital asset impairments and compliance rectification costs. Although the operating level recovered somewhat in the second quarter, the first half as a whole remained in a net loss state.
Where Did the Money Go?
The decline in South Korea's crypto trading volume is directly related to the structural shift in local capital flows.
In the first half of 2026, Korean retail funds clearly shifted from cryptocurrency to AI and semiconductor concept stocks. Samsung Electronics and SK Hynix became new favorites among retail investors due to expectations for AI memory chip demand, and retail trading volume in the Korean stock market's tech sector rose significantly during the same period. For Korean retail investors, these two markets are substitutes, not complements. The same pool of idle money switches back and forth between speculating on crypto or stocks.
The broader context is that South Korea will officially impose a 22% capital gains tax on crypto assets in January 2027. This expectation may already be suppressing the trading willingness of some investors. When profits are to be cut by one-fifth, trading frequency and leverage use naturally contract.
Two IPO Gambles
While revenues are halving, both companies are advancing their listing plans.
For Dunamu, in May 2026, a Samsung Group affiliate, Hana Bank, and Hanwha Investment & Securities acquired nearly one-fifth of Dunamu's shares for about 1.5 trillion won (approximately $1.07 billion). Meanwhile, Dunamu is progressing with a share swap cooperation with Naver Financial in preparation for a future IPO on the Korea Exchange (KRX). Naver is South Korea's largest internet company, and this deal is seen as a key step in Dunamu's transformation from a crypto exchange to a comprehensive fintech company.
For Bithumb, the company has formulated a three-stage IPO roadmap, aiming to list by 2028. The current focus is on internal control improvements and KIFRS (Korean International Financial Reporting Standards) compliance preparation. However, given its current financial performance (net loss of 108.7 billion won in the first half, operating profit margin less than 9%), Bithumb's listing valuation will face tremendous pressure.
Both companies face the same awkward question: How to explain to public market investors how a company whose revenue can halve and profits can evaporate by 80% in six months should be priced at what valuation multiple?
What Exactly is an Exchange?
This set of data pushes a long-avoided identity question in the cryptocurrency exchange industry to the forefront.
When 97% of revenue comes from transaction fees, when fee income rises and falls completely in sync with market trading volume, when profit margins can drop from 88% to 14% in five years. The financial characteristics of such a company resemble those of a brokerage with extreme cyclicality, rather than an infrastructure company with stable cash flow.
Coinbase's valuation logic in the US stock market faces the same scrutiny. During the 2024 crypto bull market, the proportion of Coinbase's subscription and service revenue increased, leading the market to believe it was transforming from a "transactional brokerage" into a "platform-based infrastructure." But when trading volume falls back, fee income remains the biggest variable determining quarterly profit direction.
Dunamu is attempting to answer this question through its cooperation with Naver. If it can integrate Naver's user traffic and payment scenarios with Upbit's trading infrastructure, the proportion of transaction fees in total revenue could decrease, making the company more like a tech company than a brokerage.
Bithumb's answer is currently unclear. Its expansion in Southeast Asia (partnering with SSID to develop a compliant platform in Vietnam) is one direction, but the scale effect in overseas markets is far from evident.
Within the crypto industry, exchanges are the business most resembling traditional finance—with licensing barriers, stable business models, and real revenue and profit. But these two Korean financial statements remind everyone: The business most like traditional finance is also most like traditional finance in being subject to cycles. It prints money during bull markets and bleeds during bear markets, with no buffer zone in between.
For Dunamu and Bithumb, which are preparing for IPOs, the biggest challenge may not be when trading volume will return, but how to make public market investors believe that the next time trading volume halves, profits won't evaporate by 80% again.
