Upbit Experiences Significant Drop in Trading Volume Amid Expanding Operations
Summary:
South Korea's leading cryptocurrency exchange, Upbit, experienced a steep decline in trading volume, dropping to $3.8 billion in early April from a high of $15 billion in March which coincided with Bitcoin's surge to a record high of $69,200. Known as the "Kimchi Premium", this disparity between Bitcoin prices on Korean and international exchanges may have triggered the spike in trading volume on March 5. Subsequently, the trading volumes fell drastically to $2.6 billion by March 31. Despite an 81% drop in net profits, Upbit continues to expand its operations, securing an MPI license from Singapore's central bank in January to offer crypto and traditional currency services within the country.
Upbit, one of South Korea's leading cryptocurrency exchanges, has seen a drop in its 24-hour trade volume to a disappointing $3.8 billion in early April, following a peak in March. March 5th had brought in almost $15 billion in daily trades, the highest the exchange had seen this year. Interestingly, this increase coincided with Bitcoin's record-breaking peak of $69,200, likely due to large investments flooding into new spot Bitcoin exchange-traded funds (ETFs) in the U.S. In fact, while Bitcoin never crossed the $70,000 mark worldwide, the cryptocurrency surged to a record-breaking 96,734,000 South Korean Won (or $72,504) on Upbit around 3:00 pm (UTC) that same day. This discrepancy – known as the "Kimchi Premium" – typically emerges in the variance between Bitcoin prices on Korean and international exchanges, and is likely to have contributed to the exchange's trading volume boom on March 5. Following this brief surge, however, trade volumes plummeted to a shocking $2.6 billion on March 31. According to digital currency statistics platform CoinGecko, trading volume on April 1 stood at $3.8 billion.
Last year, Upbit's parent company, Dunamu, reported a staggering 81% drop in net profits - from $123 million in 2022 down to a paltry $23 million. This dramatic decrease was attributed to sluggish investment markets due to economic downturns and falling digital asset prices. In spite of the company's declining profit margins, Upbit continued to expand its operations. This included acquiring a Major Payment Institution (MPI) license from Singapore's central bank on January 9, enabling the offering of crypto and traditional currency services within Singapore.
Published At
4/1/2024 4:15:03 PM
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