South Korea's two largest cryptocurrency exchanges, Upbit and Bithumb, lost nearly half their revenue in the first six months of 2026. Upbit operator Dunamu reported consolidated revenue of 408.1 billion won ($289 million), down 49.1% year over year. Bithumb posted 168.8 billion won ($119 million), a 48.7% decline.
The culprit is straightforward: trading volume collapsed. Combined volume across the five major won-denominated exchanges fell to roughly $367 billion in H1 2026, a drop of more than 54% from the same period last year. Crypto exchanges earn the bulk of their income from transaction fees, so when volume dries up, revenue follows almost one-to-one.
Profits hit harder than revenue
Will Investors Flee Bithumb and Upbit for Other Cryptocurrency Exchange Tokens?
Revenue tells only part of the story. Operating profit at Dunamu cratered by nearly 80% year over year. Bithumb fared worse, with operating profit down more than 83%. Bithumb ultimately recorded a net loss exceeding 108 billion won (roughly $70 million), dragged down by weaker fee income, valuation adjustments on its crypto holdings, and certain provisions.
Both exchanges filed these figures through mandatory disclosures to South Korea's Financial Supervisory Service. Customer deposit balances also declined at both platforms, signaling that traders are pulling capital out, not just sitting idle.
Why Korean retail traders stepped back
Lower price volatility in Bitcoin and altcoins discouraged the retail traders who dominate Korea's crypto market. When prices chop sideways, fewer people feel compelled to trade.
At the same time, sustained high U.S. interest rates redirected global capital toward traditional equities, particularly AI and semiconductor stocks. Korean investors followed the money. The speculative appetite that powered earlier crypto booms simply was not there.
Upbit gains share as liquidity concentrates
Bear markets tend to consolidate activity on the largest venue. Upbit, already dominant, picked up additional market share as smaller competitors thinned out. Bithumb's slice of the remaining pie shrank modestly.
Both companies have responded by trimming operating costs and launching promotional campaigns to keep users engaged. But neither move addresses the core problem: their business model depends almost entirely on trading fees.
Logicity's Take
Korean exchanges have been printing money during bull runs but have no meaningful hedge against volume downturns. The 80%+ operating profit collapse at both Upbit and Bithumb exposes the fragility of fee-only models. Any fintech team watching this space should note that diversification into staking, custody, or fiat rails is no longer optional. Exchanges like Coinbase and Kraken have spent years building those lines; Korean platforms are now paying the price for not doing the same.
What recovery depends on
A rebound in trading volume hinges on factors largely outside the exchanges' control: a shift in global macro conditions, potential Fed rate cuts, or renewed price momentum in digital assets. Until then, Upbit and Bithumb face continued pressure on their primary income streams.
Regulators and market watchers will track upcoming quarterly disclosures for signs of stabilization. For now, H1 2026 stands as a clear reminder that the crypto exchange business is deeply cyclical, and that the cycle has turned sharply against Korea's biggest players.
Upcoming Ethereum protocol changes that could shift trading dynamics across exchanges
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Source: Crowdfund Insider
Manaal Khan
Tech & Innovation Writer
Produced with AI assistance and reviewed by the Logicity editorial team. Learn more in our Editorial Policy.
