Bithumb Korea Reports Operational Losses Due to Declining Crypto Trading Volume
Rebeca Moen Aug 16, 2023 08:10
Bithumb Korea reported a Q2 operational loss of KRW 3.442 billion in 2023, down from a KRW 38.42 billion profit last year. The decline is attributed to reduced crypto trading volumes and fee income. The exchange is now offering no-fee events to boost activity.
According to decenter, Bithumb Korea, the company behind the virtual asset exchange Bithumb, has reported a significant operational loss in the second quarter of 2023. According to the electronic disclosure system operated by the Financial Supervisory Service on August 16, Bithumb Korea recorded an operational loss of KRW 3.442 billion in the second quarter. This is in stark contrast to the profit of KRW 38.42 billion that was witnessed during the same time period the previous year.
Earnings for the corporation as a whole also went down, decreasing by 60% yearly to a total of KRW 31.993 billion. The net loss for the time was KRW 8.583 billion, which is much less than the loss of KRW 43.3 billion that occurred during the previous year.
Analysts attribute Bithumb's deteriorating performance to the decrease in virtual asset trading volume, leading to a decline in fee-based income. The first quarter saw a bullish trend in virtual asset prices, but by the second quarter, prices stagnated below the $30,000 mark, causing a dampening of investor sentiment. While there were brief rebounds due to positive news such as major US asset managers applying for Bitcoin (BTC) ETF listings and Ripple (XRP) securing legal victories, these did not translate into sustained growth.
In response to the declining trading volumes, Bithumb has initiated a no-fee event for select virtual assets in a bid to boost activity. Currently, the exchange is not charging fees for transactions involving assets like Solana (SOL), Ethereum Classic (ETC), and Sandbox (SAND) among 30 other virtual assets. Bithumb stated, "The goal is to lower the barrier of entry for investors and increase new inflows to ensure liquidity. This no-fee zone event is the beginning, and we plan to introduce more proactive and diverse services."
Bithumb Korea, established in 2014, has become a prominent virtual asset exchange on the global stage. With its deep expertise in virtual asset trading and blockchain technology, Bithumb is poised to shape the future of digital financing platforms worldwide. As per Coinmarketcap, Bithumb currently ranks 13th in terms of spot trading volume.
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