As money in circulation rushes into the stock market amid a market boom, the "earnings shock" at virtual asset exchanges is becoming a reality. Both Upbit and Bithumb, whose combined market share tops 90%, saw their first-quarter results plunge, and expectations are that three other exchanges also failed to avoid losses.
According to the financial sector on the 18th, Dunamu, the operator of Upbit, posted a first-quarter net profit of 69.5 billion won, down 78% from a year earlier. During the same period, Bithumb's net result swung from a 33 billion won profit to an 86.9 billion won loss. Both exchanges said the main reason for the deterioration in results was "a sharp drop in transaction volume due to the downward trend in virtual asset prices." Because the main revenue source for virtual asset exchanges is transaction fees, when transactions decrease, profits decline.
According to CoinMarketCap, a global coin market site, bitcoin was around $88,000 at the end of last year but recently fell to about $77,000. During the same period, Upbit's average daily transaction value fell 44%, while Bithumb's fell 48.2%.
GOPAX's average daily transaction value this year fell 70.8% from the end of last year. Over the same period, Coinone and Korbit saw their transaction values increase 27.8% and 214.6%, respectively, but this was a short-term effect from fee-free events marking support for USDT, a dollar stablecoin, and trading-value rebate events.
Money flowing out of the virtual asset market appears to be absorbed by the stock market. From the 1st to the 15th of this month, the KOSPI's average daily transaction value totaled 52.615 trillion won. That far exceeds January (27.056 trillion won), February (32.234 trillion won), March (30.143 trillion won), and April (29.551 trillion won). The balance of demand deposits, classified as investment standby funds, surpassed 700 trillion won at the five major banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup) this month.
Major overseas exchanges are in a similar position. Coinbase, the largest virtual asset exchange in the United States, saw its trading volume in the first quarter fall 50% from a year earlier, resulting in a net loss of $394.1 million. In response to the deteriorating results, Coinbase announced a restructuring plan to lay off about 700 employees, or roughly 14% of its workforce.