2023-12-15 09:11:36
■Expectations for improvement in domestic exchange performance
Bitcoin soars and trading volume also increases
Last month, Upbit went up 108% and Bithumb went up 295%.
BTC spot ETF listing and interest rate cut expected
Starting to break out of the sluggish crypto winter
Dunamu and Hive joint ‘Web 3’ project
Korbit focuses on new inflows by strengthening security
Recently, the price of Bitcoin (BTC) has soared, and domestic virtual asset exchanges are also gaining momentum. This is because, unlike the third quarter, when the effects of the market recession were clearly visible, the price and trading volume of virtual assets, which are directly related to exchange profits, soared in the fourth quarter. Exchanges that attempted to improve their physical strength during the long recession by reorganizing subsidiaries, upgrading systems, and establishing new business foundations have high expectations for improved performance.
According to the industry on the 15th, last month’s trading volume on domestic virtual asset exchanges significantly improved compared to before. The total trading volume of Upbit, Korea’s largest exchange, in November was $102.573 billion, a 108% increase from September (approximately $49.38076 billion). Bithumb’s total trading volume last month increased by 295% to $26.48456 billion during the same period, and Coinone’s total trading volume increased by 60% to $1.645.04 billion. The trading volume of Korbit and Gopax also grew by 160% and 4%, respectively.
Naturally, expectations for performance are also rising. This is because virtual asset trading fees are the main source of revenue for exchanges, so price and trading volume determine performance. The price of BTC, which was $25,160 in September this year, rose 75.6% to $44,180 this month. It is the highest since the Terra/Luna incident last year. A Dunamu official pointed out, “It is true that trading volume has increased compared to last year due to the recovery in virtual asset prices since October.” A Bithumb official also expressed expectations, saying, “If this trend continues, the exchange’s performance will gradually improve.”
Exchanges had previously announced report cards for the third quarter that were close to failing. Upbit operator Dunamu’s third quarter sales amounted to 193 billion won, a 29% decrease from the previous year. Operating profit fell by 39.6% to 101.8 billion won, almost cut in half. Bithumb Korea, which operates Bithumb, had sales of regarding 32.5 billion won in the third quarter, down 53.5% from the previous year and recording a deficit of 600 million won. Coinone’s third quarter sales also decreased by 51% to 3.7 billion won during the same period. The background to the poor performance is the recession in the virtual asset market due to the bankruptcy of Terra, Luna, and FTX last year. A Dunamu official explained, “The third quarter of this year had a significant impact due to the overall economic downturn, decreased liquidity, and fatigue from the interest rate hike.”
As we have gone through a dark tunnel, our expectations for next year are high. The industry expects investment sentiment to improve significantly due to expectations of the approval of the BTC spot exchange-traded fund (ETF) next year, BTC halving, and interest rate cuts. In particular, the BTC spot ETF from global asset management companies such as Blackrock and Fidelity is expected to be approved in January next year. Bloomberg ETF analyst Eric Balchunas predicted, “It is highly likely that all BTC spot ETFs under review by the U.S. Securities and Exchange Commission (SEC) will be approved simultaneously on January 10th.” January 10th is the deadline for approval of the BTC spot ETF applied by Arc Invest, led by ‘Money Tree Sister’ Cathy Wood. A Bithumb official predicted, “Wouldn’t the external environment get better next year, such as interest rate cuts?” and predicted, “The approval of the BTC spot ETF and the halving effect will bring vitality to the market.”
However, it may be difficult for Bithumb and Korbit to improve their performance immediately. This is because transaction fees were eliminated in October of this year to attract investors and prevent Upbit from dominating the market. This means giving up a major source of revenue. The purpose is to prepare investor incentives ahead of the boom period. However, the change in market share is still minimal. It is impossible to stop receiving fees forever. Bithumb explained, “We will set a competitive commission rate when reintroducing commissions in the future.” A Korbit official also added, “We have not yet decided when the fee-free policy will end,” and added, “It has been less than two months since the policy was implemented, so we will monitor the situation further.”
Each of them is preparing for the spring of virtual assets in their own way. Bithumb recently decided to take steps to close three of its subsidiaries and focus on its main business as an exchange. We plan to do our best to recruit investors in preparation for the boom in the virtual asset market. Korbit and Coinone are also focusing on attracting new investors by upgrading their systems and strengthening security. Dunamu, which is number one in the market, has some leeway. In addition to the exchange business, we plan to accelerate the expansion of new businesses such as non-fungible tokens (NFTs). In particular, attention is focused on the Web 3 business of Levels, a joint venture established with entertainment company Hive. A Dunamu official said, “We have been focusing on upgrading our services since last year’s Crypto Winter (virtual asset market recession),” and predicted, “We will introduce new services in the future.”
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