Bithumb, South Korean Cryptocurrency Exchange, Resumes Transaction Fees
Date: 2024-02-06 Author: Dima Zakharov Categories: BUSINESS
Bithumb Reintroduces Transaction Fees
South Korea's leading cryptocurrency exchange, Bithumb, has wrapped up its four-month-long commission-free trading initiative. According to Insight Korea, starting from February 5th, Bithumb now charges a 0.04% commission on all cryptocurrency transactions.
Bithumb vs. Upbit: The Battle for Market Share
Bithumb is striving to regain market share from its chief competitor, Upbit. In recent years, Upbit overshadowed Bithumb, becoming the dominant force in the South Korean market. Bithumb aims to surpass Upbit by becoming the first South Korean cryptocurrency exchange to go public on the KOSPI stock market index.
Impact of Commission-Free Trading
Bithumb had initially waived transaction fees on October 4th last year, resulting in a surge in trading volumes. During this period, Bithumb's market share skyrocketed from 10% in September to 51% by the end of December. However, some critics argue that Bithumb should focus on its financial performance.
The Challenge of Maintaining Profitability
The exchange's net profit fell by 46% year-on-year in the third quarter, attributed to the pressure to boost productivity, which led to the end of commission-free trading. Critics highlight that commissions are a significant revenue source for South Korea's cryptocurrency industry.
Bithumb's Response
Bithumb's official spokesperson clarified that their decision to introduce transaction fees was in celebration of their 10th anniversary and to secure a larger market share. They acknowledged the industry's dependence on commissions and stated that offering free trading indefinitely was unsustainable. Bithumb now offers competitive fees of 0.04%.
Attracting Customers through Rewards Programs
To attract customers, Bithumb has introduced attractive rewards programs, including points-based incentives.
In summary, Bithumb's return to charging transaction fees signifies a competitive shift in the South Korean cryptocurrency market, as it strives to challenge Upbit's dominance and focus on long-term profitability.
