99% of Virtual Asset Exchange Revenue Comes from Fees... Performance Plummets as Transactions Decline

99% of Virtual Asset Exchange Revenue Comes from Fees... Performance Plummets as Transactions Decline

Dunamu and Bithumb's Business Structure Limitations... Still Lacking a Breakthrough

It has been revealed that domestic virtual asset exchanges have not been able to escape from 'fee-based business'.

Despite efforts to diversify revenue, they still remain in a business structure that relies on fees for around 99% of their revenue.

According to the Financial Supervisory Service's electronic disclosure on the 25th, in the first quarter of this year, the proportion of fee income in the revenues of the two major virtual asset exchanges, Dunamu (Upbit) and Bithumb, was recorded at 97.49% and 99.99%, respectively.

As investor sentiment in the virtual asset market froze and transaction volumes decreased, the profitability indicators of both companies naturally deteriorated.

Dunamu's revenue decreased by 54.6% from the first quarter of last year to 234.6 billion won, and operating profit decreased by 77.8% to 88 billion won. Net profit decreased by 78.3% to 69.5 billion won.

Bithumb's revenue decreased by 57.6% from the first quarter of last year to 82.5 billion won, and operating profit decreased by 95.8% to 2.9 billion won. It also turned to a deficit, recording a net loss of 86.9 billion won.

Both companies cited the contraction of investor sentiment due to the global economic slowdown and the resulting decrease in virtual asset trading volume as reasons for their performance decline.

Dunamu and Bithumb have been undertaking various businesses to discover new revenue streams and markets, building on the fee income they have earned domestically for several years, which is an extension of their efforts.

Last year, Dunamu created its own blockchain network 'GIWA Chain' and is pursuing the establishment of financial infrastructure with Hana Financial Group and POSCO International.

It also owned stakes in subsidiaries whose businesses are unrelated to virtual asset trading, such as 'Viber', a used luxury watch brokerage platform, and 'MPAGE', a digital sheet music platform.

In addition to fee income from its virtual asset exchange, Bithumb also generates other revenue, such as receiving quote inquiry fees from virtual asset data analysis companies.

Recently, to expand its presence overseas, it also signed a comprehensive business agreement (MOU) with SSID, a subsidiary of Vietnamese securities firm SSI Securities, for a local virtual asset exchange business.

Although various attempts are being made, there are no clear revenue-generating sources yet, leading to the assessment that they are forced to rely solely on fee income from the domestic market.

An industry official said, "Since most of the revenue comes from fees, there is a perception that they are excessively marketing to increase trading volume," adding, "We are waiting for institutional changes so that the services provided by exchanges can be diversified."