First, let's look at some heart-wrenching data, and you'll understand what it means to go 'from heaven to hell.' Back in January this year, the two major exchanges in South Korea, Upbit and Bithumb, were doing remarkably well, with an average daily trading volume soaring to $7.8 billion, equivalent to earning a small target level of fees just by lying down every day. But by November, these two giants directly 'plunged,' with the average daily trading volume dropping to only $1.88 billion, a decrease of over 75%! What does that mean? It means that the trading volume from the previous day now takes four and a half days to accumulate, and the fee income has been cut in half and then cut again; employees' afternoon tea has probably switched from Starbucks to instant coffee.
Do you remember the 'Bitcoin frenzy' in the third quarter? At that time, when Bitcoin rose, Korean investors were like they had taken steroids, and Upbit's parent company Dunamu made an operating profit of 235.3 billion won (about 161.7 million USD), an increase of 1.8 times year-on-year; Bithumb was even more aggressive, with profits soaring eight times to 70.1 billion won. At that time, the industry was shouting, 'The Korean cryptocurrency market is about to take off,' but what happened? When Bitcoin dropped below the six-month low, the market switched directly from 'crazy bullish' to 'extreme fear,' and investors collectively became 'turtled up,' even too lazy to open trading software. Think about it, exchanges mainly rely on transaction fees for income; if no one trades, it’s like a restaurant with no customers, just watching the customer flow disappear and revenues vanish.
In fact, this wave of crisis has long been predicted, but when the market is good, no one is willing to puncture the bubble. I have long said that Korean cryptocurrency exchanges are a typical case of 'living off the sky,' with a profit model so singular that it is alarming. When the market is good, trading volume rises, and profits soar; when the market cools down, they immediately show their weakness. It's like farmers relying on the weather to grow crops; when droughts or floods strike, they go hungry, lacking any risk resistance. Now that the market has cooled down, it's just a reminder for these exchanges: they can't always expect the market to provide sustenance. They need to think of new avenues, such as developing compliant derivative services or engaging in institutional-level custody services; if all else fails, even offering cryptocurrency education courses would be better than hanging on to the 'transaction fees' of a crooked tree.
To be honest, this downturn in the market is both a crisis and an opportunity for the Korean cryptocurrency industry. When the market was hot, any exchange could make a living, but now that the market has cooled, those small exchanges without strength or innovation will definitely be eliminated. Only those who can survive must truly compete with real strength. Moreover, this can force the entire industry to reflect: how to break free from the curse of 'living off the market'? How can profit models become more stable? Once these questions are clarified, the Korean cryptocurrency market can truly 'stand up,' instead of always being a 'follower' of the market.
Finally, let me share a heartfelt message: the cryptocurrency market has never been a place for 'easy money.' Whether it's exchanges or investors, everyone must remain clear-headed. I will continue to track the developments of Korean exchanges to see if they can come up with any new tricks, and I will share more industry insights. If you want to know which exchange can successfully 'pass the tribulation' first and want to understand the latest trends in the cryptocurrency market, be sure to follow me! Next time we'll continue our chat and help you see through the 'ways' of the crypto circle, so don't miss the exciting content!
