TL;DR
- Market downturn: Upbit and Bithumb saw steep declines in revenue and profit as crypto trading activity weakened and major assets like Bitcoin and Ethereum fell sharply.
- Investor shift: Liquidity contraction and delays to key sector developments pushed South Korean investors toward equities, with the KOSPI doubling and draining capital from digital assets.
- Strategic moves: Dunamu advanced a share-swap with Naver Financial and attracted major institutional investors. At the same time, Bithumb pursued its 2028 IPO plan and expanded abroad through new partnerships.
South Korea’s crypto sector faced a pronounced slowdown in the first half of 2026, with Upbit and Bithumb posting steep declines in revenue and profitability as trading activity weakened across the market. The downturn reflected shrinking liquidity, falling digital asset prices and a broad investor shift toward domestic equities.
Market slump hits exchange revenues
Dunamu, the operator behind Upbit and Bithumb’s largest competitor, reported a sharp contraction in its financial results. Consolidated operating revenue dropped 49.1% year-over-year to 408.1 billion won ($289 million), while operating profit fell 79.7% to 111.5 billion won ($79 million). Net profit also declined 74.1% to 108.4 billion won ($77 million).
Upbit and Bithumb both saw similar pressure. Bithumb’s operating revenue slid 48.7% to 168.8 billion won ($120 million), and operating profit plunged 83.4% to 14.9 billion won ($11 million). The exchange swung to a net loss of 108.7 billion won ($77 million), reversing a net profit of 55 billion won ($39 million) a year earlier. Nearly all of its revenue continued to come from trading fees.
The broader market downturn was driven by falling asset prices. Bitcoin dropped more than 30% in H1, sliding to around $60,000 from roughly $90,000 at the start of the year. Ethereum performed even worse, declining from $3,000 to about $1,600. Dunamu attributed the weak results to a global contraction in digital asset liquidity and fading investor sentiment.
Capital shifts to equities as sector faces setbacks
Several negative developments weighed on the industry, including delays to the Clarity Act, Strategy’s Bitcoin sales and sizable outflows from U.S. crypto ETFs. Meanwhile, South Korean investors redirected capital toward domestic equities, with the KOSPI more than doubling in H1 on strong semiconductor momentum from Samsung Electronics and SK Hynix.
The five licensed domestic exchanges, including Upbit and Bithumb, saw combined Q2 trading volume fall 49.5% year-over-year to $146.43 billion, according to Bitwatch. Despite the downturn, both platforms continued advancing long-term strategic plans.
Exchanges pursue restructuring and expansion
Dunamu is progressing through a major share-swap with Naver Financial that would make it a wholly owned subsidiary, with a potential Nasdaq listing targeted within five years. Hana Financial Group and Samsung affiliates also acquired meaningful stakes this year.
Bithumb is preparing for an IPO in 2028, focusing on internal control upgrades and a preliminary listing review in 2027. It also attracted interest from Kiwoom Securities and expanded internationally through a partnership with SSI Digital in Vietnam. Both Upbit and Bithumb now face a challenging environment but remain active in reshaping their future positioning.
