South Korea is the fourth most active country in the world in crypto trading, per Coinhills. This, however, did not count for much as three of the country’s top four bitcoin exchanges recorded losses in 2018. The big four are Upbit, Bithumb, Coinone and Korbit. According to Business Korea, only Upbit recorded a profit among the four.
The largest loss was incurred by Bithumb. Last week, its parent company BTC Korea.com announced a net loss of 205.4 billion Korean won ($180.7 million) for 2018. The losses were largely attributed to the fall in the value of the cryptocurrencies that Bithumb held.
— The Korea Times (@koreatimescokr) April 12, 2019
Korbit, on the other hand, posted a net loss of 45.80 billion Korean won ($40.3 million) for fiscal 2018. In the second half of last year, Coinone recorded a net loss of 5.8 billion Korean won ($5.1 million).
Upbit Earns the Bragging Rights
In contrast, Upbit posted a net profit of 143.3 billion Korean won ($126.03 million). This was attributed to the fact that the exchange had a lower level of cryptocurrency holdings vis-à-vis its rivals.
The losses do not come as a surprise as some of the big four South Korean exchanges had already indicated they were undergoing a rough patch following the downturn in the crypto markets. Last month, Bithumb announced it was laying off over half of its staff. This reduced the number of employees from 310 to 150.
By posting a net profit Upbit joins a club of a select few that managed to weather the ‘crypto winter’. The select club includes Binance which is estimated to have posted a net profit of $78 million in 2019’s Q1. Since Binance does not publicly reveal its financials, the figure was computed based on quarterly buybacks of its BNB token.
While Binance has not confirmed the exact amount, the fact that it is profitable is not in doubt. Two months ago, its chief financial officer, Wei Zhou, told CNBC that the last year’s cryptocurrency market meltdown had not affected the firm’s profitability:
To date, even in this bear market, we still run a profitable business.
Binance has a Tough Crypto Rival to Beat – Itself
Based on the estimated net profit for Q1, Binance will likely need to make more in the coming quarters. This is if it intends to beat last’s year’s profits targets. In July 2018, the CEO of Binance, Changpeng Zhao, disclosed to Bloomberg that the exchange had a net profit target $0.5 billion to $1 billion for the year.
— Fion Li (@fion_li) July 6, 2018
The enviable position that Binance and Upbit occupy in the crypto space does not come as a surprise though. Last year in March, HowMuch estimated that the two exchanges were raking in average daily revenues of over $3 million. Binance’s average daily revenues were estimated to be $3.48 million while those of Upbit were estimated to be $3.42 million.