Author: Xiao Bing
South Korea's two largest cryptocurrency exchanges simultaneously reported almost symmetrically declining performances.
On August 14, Dunamu, the parent company of Upbit, submitted its 2026 semi-annual report to the Electronic Disclosure System of the Financial Supervisory Service (FSS) of Korea. 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 ebb tide.
Dunamu's consolidated revenue for the first half of the year was 408.1 billion won, a decrease of 49.1% year-on-year; operating profit was 111.5 billion won, down 79.7%; net profit was 108.4 billion won, a decrease of 74.1%.
Bithumb's revenue for the first half was 168.8 billion won, down 48.7% year-on-year; operating profit was 14.9 billion won, a 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 declines in revenue were almost identical, around 49%. But the gap in profitability is vast. While Dunamu's profits plunged, it still earned 108.4 billion won. Bithumb turned directly to a loss, with the loss amount even exceeding Dunamu's net profit.
The Same Ebb Tide, Different Water Levels
The synchronized halving of the two companies' revenues 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 revenue naturally followed suit.
But why could Dunamu remain profitable while Bithumb lost money?
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 proportion was even higher, almost 100% coming from transaction fees. Both are highly dependent on trading fees, but Dunamu controlled its costs better. Bithumb's loss includes impairment losses on digital assets and administrative expenses related to regulatory penalties.
Another figure illustrates the point. At its peak in 2021, Dunamu could retain 88 won in operating profit for every 100 won of revenue. By the second quarter of 2026, this number became 14 won. The operating profit margin fell 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, which included substantial digital asset impairments and compliance rectification costs. Although the operational level recovered somewhat in the second quarter, the first half overall still resulted in 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 the flow of local capital.
In the first half of 2026, retail funds in South Korea clearly shifted from cryptocurrency to AI and semiconductor-themed stocks. Samsung Electronics and SK Hynix became new favorites among retail investors due to expectations of demand for AI memory chips, with retail trading volume in the technology sector of the Korean stock market rising 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 either speculating in crypto or trading stocks.
A broader background is that South Korea will formally levy a 22% crypto asset capital gains tax starting January 2027. This expectation may already be suppressing the trading willingness of some investors. When a fifth of the profit is to be taxed, trading frequency and leverage use naturally contract.
Two IPO Gambles
While their revenues were halved, both companies are advancing their listing plans.
On Dunamu's side, in May 2026, Samsung Group-affiliated companies, Hana Bank, and Hanwha Investment & Securities acquired nearly one-fifth of Dunamu's shares for approximately 1.5 trillion won (about $1.07 billion). Simultaneously, Dunamu is progressing with a share swap cooperation with Naver Financial, preparing 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.
On Bithumb's side, the company has outlined a three-phase IPO roadmap, aiming to list by 2028. The current phase focuses on internal control rectification and preparation for KIFRS (Korean International Financial Reporting Standards) compliance. However, given its current financial performance (a net loss of 108.7 billion won in the first half, with an operating profit margin of less than 9%), Bithumb's IPO valuation will face enormous pressure.
Both companies face the same awkward question: How to explain to public market investors what valuation multiple should be applied to a company whose revenue can halve within six months and whose profit can evaporate by 80%?
What Exactly is an Exchange?
This set of data pushes a long-evaded identity question of 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 the profit margin can drop from 88% to 14% within five years, the financial characteristics of this company resemble a brokerage with extremely strong cyclicality, rather than an infrastructure company with stable cash flows.
Coinbase's valuation logic in the U.S. stock market faces the same scrutiny. During the 2024 crypto bull market, the proportion of Coinbase's subscription and service revenue increased, and the market once believed it was transitioning from a "transactional brokerage" to a "platform-based infrastructure." But when trading volume recedes, transaction fee revenue remains the biggest variable determining quarterly profit direction.
Dunamu is trying 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 potentially decline, making the company more like a tech company than a brokerage.
Bithumb's answer is currently unclear. Its expansion in Southeast Asia (cooperating with SSID to develop a compliant platform in Vietnam) is one direction, but the scale effect in overseas markets is far from apparent.
Within the crypto industry, exchanges are the business most akin to traditional finance—with license barriers, stable business models, and real revenue and profit. But these two financial reports from South Korea remind everyone: the business most like traditional finance is also the most subject to cycles like traditional finance. Printing money during bull markets, bleeding during bear markets, with no buffer zone in between.
For Dunamu and Bithumb, which are preparing for their IPOs, the biggest challenge may not be when trading volume will return, but how to convince public market investors that the next time trading volume is halved, profits won't evaporate by 80% again.
