Coin Trading Plummets Amid Record KOSPI Rally: "Only Recovery in Investor Sentiment Can Help" [Bitcoin Now]

Investment Standby Funds Flow Out and Trading Volume Declines
Performance Deterioration... U.S. Coinbase Also Hit Hard
Unlike Overseas, Korean Exchanges Unable to Diversify Due to Regulation

As the stock markets at home and abroad continue to flourish, investment capital is rapidly flowing out of domestic virtual asset exchanges. The largest virtual asset exchange in the U.S. is also facing challenges, but it is seeking solutions through diversification of its business structure. There are opinions that domestic exchanges, which are constrained by regulations, are likely to be hit even harder.

Deposit Outflows and Declining Trading Volume...Worsening Performance

According to the Electronic Disclosure System of the Financial Supervisory Service on the 26th, as of the first quarter of this year, customer deposits at Upbit and Bithumb stood at 6.9479 trillion won. This is a decrease of 870.6 billion won from 7.8185 trillion won at the end of December last year. Specifically, Upbit's deposits fell by 636 billion won (11%) from 5.7833 trillion won to 5.1473 trillion won. Bithumb's deposits also decreased by 234.6 billion won (12%), from 2.0352 trillion won to 1.8006 trillion won. This trend has continued since last year. In December 2024, Upbit and Bithumb had deposits of 10.3162 trillion won, but by December last year, 2.4977 trillion won had already flowed out. Customer deposits are similar in concept to stock market settlement funds. Deposits refer to funds that virtual asset users have transferred to their accounts to purchase virtual assets or money left in KRW after selling virtual assets. Settlement funds are money transferred to securities accounts to buy stocks or left in the account after selling stocks. Both indicators show the level of investment demand waiting in the market.

The average daily trading volume has also declined. According to The Block’s data, the combined trading volume of Upbit and Bithumb dropped from $2.92995 billion (about 4.4014 trillion won) in the fourth quarter of last year to $2.24983 billion (3.3801 trillion won) in the first quarter of this year. Since trading volume is directly linked to trading fees, this has also impacted their financial results. Upbit (Dunamu) saw its trading fee revenue decrease to approximately 228.7 billion won in the first quarter, down from 367.4 billion won in the fourth quarter of the previous year. Bithumb’s trading fee revenue also fell from 119.6 billion won to 82.5 billion won over the same period. As a result, operating profit declined compared to the first quarter of last year for both Dunamu (-78%) and Bithumb (-95.8%). Both companies attributed these poor results to the sluggish virtual asset market and reduced trading volumes.

The situation is not much different for Coinone, Korbit, and GOPAX. According to the 2025 audit report, the combined customer deposits at these three exchanges decreased by 26.3%, from 384 billion won at the end of 2024 to 283.1 billion won at the end of last year. In terms of trading volume, GOPAX saw a 70.8% decrease compared to the second half of last year, while Coinone and Korbit saw increases of 27.8% and 214.6%, respectively. However, these changes appear to be temporary. Hyunkyung Yang, a researcher at iM Investment & Securities, stated, "Given that trading volume declined again after the end of events such as trading volume refund promotions or zero-fee campaigns, the effect seems to be one-off rather than structural growth."

Investment funds on standby are flowing into the stock market. According to the Korea Financial Investment Association, as of the 19th, investor deposits in the KOSPI market, which represent stock market cash waiting to be invested, stood at 126.9599 trillion won—more than double the 56.185 trillion won recorded a year earlier.

Coinbase, the Largest U.S. Exchange, Also Hit Hard...Pursuing Business Diversification

The decline in virtual asset trading volume is a global trend and has affected the performance of global exchanges. Coinbase, the largest virtual asset exchange in the U.S., reported first-quarter 2026 revenue of $1.41 billion (about 2.1216 trillion won) and trading revenue of $750 million (1.1285 trillion won), both of which fell far short of market expectations. These figures represent decreases of 21% and 23%, respectively, compared to the previous quarter. Additionally, subscription and service revenue, as well as interest and other income, decreased by 16% and 29%, respectively. Net profit was in the red for the second consecutive quarter. The main factor driving poor performance was a slump in retail investor trading (a 54% decline in trading volume).

As Coinbase’s revenue structure—previously centered on spot trading—was directly hit, the company introduced short-term solutions. For example, it announced a restructuring plan affecting 700 employees and decided to expand its use of artificial intelligence (AI) and pursue cost reductions. Furthermore, Coinbase is actively working to transform its business structure. It is seeking to diversify its revenue streams by reducing its dependence on spot trading. Notable strategies include expanding its derivatives business through the acquisition of Deribit, strengthening its stablecoin business based on Circle (USDC), and increasing the proportion of subscription and service revenue. The company is also working to build a payment network to prepare for the era of AI agents.

Domestic Exchanges Blocked by Regulation—Waiting for Investor Sentiment to Recover

Domestic exchanges are offering short-term responses such as promotions, but these have not led to structural growth. This is because, unlike Coinbase, it is difficult to rapidly change their business structure. In Korea, the institutional framework for virtual asset trading by institutional investors, virtual asset-based spot ETFs, stablecoins, token-based payments, and derivatives trading is very limited. Additionally, regulations on overseas business expansion make it difficult to grow new businesses. Hyunkyung Yang, a researcher, said, "Ultimately, domestic exchanges still depend heavily on trading volume and commission-based revenue, so the current structure means that a decline in trading volume has a direct impact on their results." She added, "For the time being, whether trading volume recovers and investor sentiment improves will be the most important variables."

This content was produced with the assistance of AI translation services.