Upbit, one of the largest cryptocurrency exchanges in South Korea, experienced a decrease in its 24-hour trading volume in early April. After reaching its peak in March with a trading volume of nearly $15 billion, Upbit’s trading volume dropped to $3.8 billion at the start of April. The surge in trading volume in March can be attributed to Bitcoin’s new all-time high of $69,200, which drove inflows into new spot Bitcoin exchange-traded funds (ETFs) in the United States.
On March 5, when Bitcoin was trading below $70,000 globally, Upbit recorded a new all-time high of 96,734,000 South Korean Won (approximately $72,504). This price discrepancy between South Korea and the rest of the world is commonly known as the “Kimchi Premium.” Despite the increase in trading volume, the surge was short-lived as it dropped to as low as $2.6 billion on March 31.
In April, Upbit’s 24-hour trading volume stood at $3.8 billion, according to CoinGecko, a coin information tracker. Last year, Upbit’s parent company, Dunamu, reported an 81% decline in net profit. In November, Dunamu’s profit was recorded at $23 million, significantly lower than the previous year’s $123 million. The company attributed the decline in profit to a sluggish investment market and the decreasing prices of digital assets.
Despite the decline in profits, Upbit continued to expand its business. In January, it obtained a Major Payment Institution (MPI) license from Singapore’s central bank, allowing it to offer cryptocurrency and fiat-related services in Singapore. The company’s efforts to expand into new markets may help mitigate the impact of the profit decline.
It is important to note that the fluctuations in trading volume and profit are common in the volatile cryptocurrency market. The success of exchanges like Upbit is closely tied to market conditions and investor sentiment, which can vary greatly over time.
I wouldn’t trust Upbit at this point. They can’t seem to keep things stable. 🙅♂️
The decline in profits and trading volume is definitely a cause for concern. How will Upbit recover from this?
If Upbit wants to stay relevant, they need to figure out a way to navigate through the ups and downs of the market.
The “Kimchi Premium” is just another example of how the cryptocurrency market operates differently in different regions. 🌍