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Bithumb Korea Financial Report for FY2023
Bithumb Korea, the operator of the Bithumb crypto exchange, disclosed a year-on-year decrease in profitability for the Financial Year 2023, despite recent increases in trading volumes.
Sales Figures and Profit Decline
According to South Korean media outlet New Daily, year-on-year sales figures dropped by 58% as per a Bithumb statement on April 2. The exchange business reported operating losses of just over $11 million in FY2023, with sales revenue decreasing from $236.7 million in FY2022 to just over $100 million in FY2023.
The net profit also saw a significant decline to $18 million, a 74.5% decrease from the previous year. Despite the decline, Bithumb Korea remained profitable for the fourth consecutive year.
Factors Affecting Financial Results
Bithumb officials attributed the performance decline to the challenging market conditions of the crypto winter. The decision to suspend commission fees in FY2023 was seen as a strategy to enhance market share but may have impacted profitability negatively.
Commission-Free Trading and Market Response
Last year, Bithumb stopped charging commission on coin trades to compete with Upbit, leading to increased transaction volumes. However, the reliance on commission fees for revenue prompted the exchange to reintroduce trading fees in February this year.
Potential IPO Plans
Bithumb and Upbit are pursuing different paths regarding initial public offerings (IPOs). While Bithumb aims to accelerate its listing on the Korea Exchange by 2025, Upbit’s operator, Dunamu, is currently in a “wait and see mode” regarding a potential IPO.
Dunamu, with an estimated market capitalization of $3.6 billion, is observing market conditions before deciding on a public offering. Bithumb, on the other hand, is looking to expedite its IPO process by spinning off non-exchange-related businesses.
Future Strategies and Market Outlook
Bithumb continues to introduce new services and rewards programs to attract customers, alongside offering competitive commission rates. Both exchanges are closely monitoring market developments before making significant strategic moves.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
