Crypto Exchange Upbit Operator Sees 47% Decline in Q1 Revenue

Cryptocurrency exchanges are now facing the wrath of declining market sentiment. Dunamu, the operator of the South Korean crypto exchange Upbit, reported the first quarter of 2022’s operating profit at 287.8 billion won ($232.75 million), which was a yearly decline of 46.9 percent.

According to a report by The Korea Times, the sales of the company dropped by 28.6 percent over three months.

“Our sales and revenue fall is attributable to tightening global liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term conditions, and digital asset price falls,” a Dunamu spokesperson said.

Dunamu generates most of its revenue from charging commissions for executing cryptocurrency trades. The company witnessed a massive jump in its performance last year when the cryptocurrency market was at its peak and retail demand exploded.

Bearish Crypto Market

However, the fall in sales and revenue was expected, given the declining cryptocurrency prices. Bitcoin, which is the largest cryptocurrency by market cap, recently ebbed below $27,700 apiece before recovering above $37,000.

Further, the collapse of the algorithmic stablecoin Stablecoin Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including Read this Term project, Terra pressed the market towards a decline. All these factors are signaling a critical second quarter for Dunamu and other cryptocurrency exchanges with skeptical earnings.

Meanwhile, Dunamu is now focused on the international expansion that would diversify its revenue sources. It has already entered the United States market with a partnership with the South Korean music label, HYBE. The two companies formed a joint venture to offer services around non-fungible tokens (NFTs).

Most of the cryptocurrency exchanges are private companies. While Dunamu was transparent with its revenue and earnings, the financials of most of the other major crypto trading venues are not known to the public.

Furthermore, Coinbase, which is a major crypto exchange and is listed on an American stock exchange, reported a 27 percent plunge in its Q1 revenue, which was mostly due to a significant drop in trading volume.