South Korea’s leading cryptocurrency exchanges, Upbit and Bithumb, are weathering one of their toughest financial storms in years, as the first half of 2026 brought dramatic declines in profits and trading activity. The numbers tell a sobering story: on August 15, 2026, Dunamu, the operator of Upbit, revealed its second-quarter operating profit had plummeted by 73% compared to the previous quarter, a drop the company attributed to weakening global liquidity and a cooling of investor sentiment throughout the cryptocurrency market, according to Ajunews and Digital Today.
The pain was not limited to Upbit. Bithumb, another major player, swung from a 22 billion KRW profit to a 21.8 billion KRW loss in the same period. For the first half of 2026, Dunamu’s consolidated operating revenue stood at 408.1 billion KRW—a sharp 49.1% decrease from the 801.9 billion KRW reported in the first half of 2025. Its operating profit dropped a staggering 79.7% to 111.5 billion KRW, with net profit tumbling 74.1% to 108.4 billion KRW. Bithumb, meanwhile, saw its own first-half revenue drop 48.7% year-on-year, and its operating profit fell 83.4%. The company ended up with a net loss of 108.7 billion KRW, compared to a net profit of 55 billion KRW in the previous year, as reported by Digital Today.
What’s driving this downturn? It’s a cocktail of factors, both local and global. The domestic cryptocurrency trading volume for the second quarter of 2026 was about $146.43 billion USD, down nearly 50% from the same period last year, according to CoinGecko data cited by Ajunews. At the same time, the South Korean stock market was booming. The average daily trading volume in the domestic stock market in Q2 2026 hit roughly 118 trillion KRW, a 39.8% increase from the previous quarter. Investors, it seems, are shifting their focus from digital assets to traditional equities, chasing the rally in AI and semiconductor stocks that has gripped markets worldwide.
Both Upbit and Bithumb pointed to this shift in investor interest as a key reason for their lackluster results. Dunamu cited the contraction in global digital asset market liquidity and a chill in investor psychology, while Bithumb highlighted the ongoing hawkish interest rate policies in the US and the migration of both domestic and foreign investors toward the stock market, especially in sectors like artificial intelligence and semiconductors.
This migration isn’t just a passing trend—it’s hitting the exchanges where it hurts most: their bottom line. Domestic exchanges rely on transaction fees for over 98% of their revenue, so when trading volume shrinks, so do their earnings. The structure is simple but unforgiving: fewer trades mean less income, and there’s little cushion for such a sudden downturn. To make matters worse, the drain isn’t limited to local markets. An estimated 700 trillion KRW worth of virtual assets have moved from domestic to overseas exchanges between 2021 and 2026, with about 77 trillion KRW expected to move abroad in 2026 alone.
There are ripples beyond the exchanges, too. K-Bank, which partners with Upbit for digital asset deposits, saw its holdings decrease by 14.638 trillion KRW in the second quarter, falling to 37.352 trillion KRW. This drop in exchange deposits could also impact the bank’s low-cost funding and related income streams, as noted by Ajunews.
Globally, the cryptocurrency market is facing its own headwinds. On August 16, 2026, Bitcoin was trading around $63,000, showing little upward momentum despite the US stock market reaching all-time highs, according to TopStarNews. At 3:31 PM ET on August 15, Bitcoin was priced at $63,092.8, up just 0.2%. Strategic, one of the largest Bitcoin holders, reportedly sold about 1,690 Bitcoins worth approximately $108.6 million, adding further selling pressure. The US Securities and Exchange Commission (SEC) delayed its innovation exemption plan for tokenization projects, increasing regulatory uncertainty. Meanwhile, the US Office of the Comptroller of the Currency (OCC) provisionally approved World Liberty Trust Company as a national trust bank, sending mixed signals to the market.
Back in Korea, the domestic 24-hour cryptocurrency trading volume on August 16 was 967.8 billion KRW, down 21.6% from the previous day. Upbit and Bithumb accounted for about 55.4% and 41.2% of this volume, respectively. While major coins like Ripple (XRP) and Bitcoin held steady in the top ten by trading volume, the real action was in altcoins: Cow Protocol surged by 38.89%, Wallas by 16.95%, and Enso by 15.41% on Upbit. These spikes, however, did little to offset the broader decline in overall trading activity.
Looking ahead, several factors loom large. The introduction of a new cryptocurrency tax in 2027, which will impose a 22% rate (including local income tax) on annual gains exceeding 2.5 million KRW, could further dampen trading—especially among younger investors, who make up a significant portion of the market. A financial industry insider told Ajunews, "If taxation is implemented, there is a possibility that domestic cryptocurrency trading will shrink further, especially among the younger generation."
Faced with this challenging environment, both Upbit and Bithumb are seeking new growth engines. With the government gradually allowing corporate participation in the virtual asset market, the exchanges are ramping up efforts to attract corporate clients, who typically trade in larger volumes than individuals. Bithumb is also enhancing its AI-based trading convenience and preparing for regulatory changes, while Dunamu is investing in internal systems for user protection and market soundness. Dunamu has even expanded into digital asset custody and security infrastructure, recently securing a contract with the National Police Agency to manage seized virtual assets.
Yet, the path to recovery is far from certain. The industry’s heavy reliance on trading fees means that a sustained rebound in trading volume is crucial. With the opening of the corporate market delayed and the individual spot trading model still dominant, exchanges are under pressure to diversify their revenue streams. As Digital Today observed, how quickly these companies can secure new sources of income beyond transaction fees will likely determine their future performance.
All eyes are now on a handful of key variables: Bitcoin’s ability to hold above the $63,220 support level, the SEC’s regulatory timetable, the release of US personal consumption expenditure data on August 26, and—perhaps most importantly—the recovery of domestic trading volume. For now, the cryptocurrency market in Korea is holding its breath, waiting to see whether this is a temporary dip or the beginning of a longer winter.