The domestic virtual asset exchange, Bithumb, which holds the second-largest market share, is beginning to see the effects of its 'marketing bombardment' that started last year in anticipation of its initial public offering (IPO) in the first half of next year. Bithumb has surpassed a market share of 30%, and since the fourth quarter of last year, it has outpaced Upbit in both the number of new subscribers and new application installations.
According to the monthly new subscriber and new app installation status data submitted to Democratic Party of Korea lawmaker Seo Mi-hwa's office by the Financial Supervisory Service on the 2nd, Bithumb has surpassed Upbit in the number of new subscribers since October of last year. After never being able to beat Upbit in new subscribers throughout the first half of last year, Bithumb significantly increased its new subscribers after October last year, securing twice as many new members as Upbit in April. During the same period, the number of new app installations also exceeded that of Upbit.
In June, Bithumb's market share exceeded an average monthly share of 30% for the first time this year. According to the global virtual asset statistics site CoinGecko, last month the share of the top five Korean won exchanges was ▲ Upbit 66.39% ▲ Bithumb 30.6% ▲ Coinone 2.32% ▲ Korbit 0.58% ▲ Gopax 0.11%. Bithumb, which had remained in the low 10% range in market share this year, did not surpass 30% until May, lingering at 28.9% despite aggressive marketing. Last month, the transaction amount increased by 57.6% compared to the same period last year, amounting to approximately 92 trillion won.
With the appointment of a new CEO at Upbit, the operating company Dunamu cannot help but pay attention to its goal of 'maintaining market share' this year. Dunamu raised its advertising expenses, which averaged about 3 billion won per quarter last year, to about 8 billion won in the first quarter of this year. This is similar to Bithumb's advertising expenses (9.6 billion won) during the same period.
Bithumb's rise in market share is attributed to various partnerships and marketing efforts. According to the public announcement for the first quarter of this year, Bithumb's operating expenses for the first quarter amounted to 126.9 billion won, a 66.7% increase compared to the same period last year (76.1 billion won). In particular, advertising expenses rose significantly from 1.8 billion won in the same period last year to 9.6 billion won, and promotional expenses also increased from 35.7 billion won to 66.9 billion won. This amount accounts for about one-third of the first quarter revenue (194.7 billion won).
Bithumb invested nearly 200 billion won in marketing costs over the past year. Bithumb is conducting a wide range of marketing activities, collaborating with retail corporations such as Emart and Shinsegae, as well as the cultural arts and sports sectors.
The fact that Bithumb is focusing on market share is interpreted as being largely due to the IPO. According to the announcement, Bithumb is preparing for a listing on the KOSDAQ market in April next year, pushing for a spin-off and striving to secure its market share. The revenue sources for domestic Korean won exchanges are essentially dependent on transaction fees, and since Upbit holds a market share of 70%, effectively monopolizing the market, Bithumb has consistently been criticized for its disappointing market share.
Along with market share, Bithumb must pay the most attention to its governance structure in preparation for its listing. Until now, Bithumb has been controversial due to its complex governance structure and uncertainties regarding its actual owner. In April, Bithumb submitted a securities registration statement to the Financial Services Commission for the spin-off and is currently undergoing corporate due diligence. However, the complicated governance structure remains a challenge that needs to be addressed.
A securities industry official noted that 'the market is still cautious about Bithumb's IPO success,' explaining that 'repeated management disputes and uncertainties regarding the actual owner can only act as sources of anxiety for investors.'