Bithumb’s strategic move to eliminate trading fees may have backfired.
Bithumb Korea’s fiscal performance for the year 2023 took a significant hit as it remained unfazed by the improvement in the trading volume that the platform witnessed throughout the year.
With a more than 57% decline in annual revenue, dropping from 3.201 billion Korean won in 2022 to 1.358 billion won in 2023, Bithumb’s disappointing figures can be attributed to several factors, including a controversial trading policy to woo retail traders.
According to a report by the Korean news platform Newdaily, Bithumb Korea’s net profit plummeted by 74.5%, reaching 243 billion won compared to 954 billion won in the previous year, even while maintaining a surplus for the fourth consecutive year.
The primary factor contributing to these financial woes was the depreciation of crypto prices amid the extensive market winter. Moreover, Bithumb’s decision to implement a fee-free trading policy in the fourth quarter of 2023 further exacerbated its revenue decline.
Despite the financial challenges, Bithumb continued its expansion across South Korea in 2023, aiming to ramp up accessibility amidst unfavorable market conditions.
Bithumb saw nearly $3 billion in Bitcoin trading volume in January, whereas Upbit’s volume remained under $1 billion.
This was a huge feat, considering Upbit dominated the South Korean crypto landscape.
The trading volume of the two top crypto exchanges soared following the market recovery that briefly resulted in Bithumb hitting an all-time high market share of 72% in early February.
Meanwhile, Bithumb’s IPO aspirations also faced a setback due to internal strategy reassessment, as cited by the company officials, amidst turmoil concerning the role of former chairman Lee Jeong-hoon.
Bithumb was previously reported to debut on the South Korean stock market and was gearing up for an initial public offering (IPO) on the Kosdaq, which is essentially the Korean equivalent of the Nasdaq, slated for the latter half of 2025.