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Bithumb, South Korea's largest cryptocurrency exchange, has increased its revenue by 171 times in 2017.
BTCKorea, the parent company of Bithumb, is a public company listed on the KRX South Korean Stock Exchange. It is necessary to publish its results and since its only subsidiary is Bithumb, the revenues and profit margins of BTCKorea are automatically those of Bithumb.
According to Coindesk Korea, Bithumb has increased its turnover by 171 times in 2017, compared to its turnover in 2016. Bithumb takes 0.15% of each order in fees of operation, and the fee model remains the main revenue stream of the cryptocurrency exchange.
In 2017, especially in the fourth quarter, the volume of South Korean cryptocurrency trades increased exponentially, as the demand for cryptocurrencies like Bitcoin and Ethereum exploded. The main cryptocurrency trading platforms were sold at high valuations and stock prices of traded cryptocurrency trades jumped. Korbit, the third cryptocurrency trading platform in South Korea, was acquired for $ 150 million.
In 2017, Bithumb recorded a net profit of $ 420 million but recorded a turnover of $ 330 million. Investors in the public market were surprised by the absurd figures relayed by Bithumb, since its net profit was higher than its turnover, which is not possible in most cases except in case of substantial income outside its main revenue model.
In an interview with Coindesk Korea, Bithumb's representative said that the company had made a profit of $ 90 million outside its main business model and trading platform of cryptocurrencies ] . Bithumb hinted that this could have been generated by office rentals, interest rates, and investment gains.
"The details of Bithumb's balance sheet will not be finalized until March 30, at a meeting of the board of directors." As such, it is difficult to confirm the details of the balance sheet. the company in early April.Bithumb will likely present the details of its profits in late April, "Bithumb said.
Often, non-operating income comes from businesses whose properties are leased to other individuals or businesses. For example, if Bithumb has a commercial building in the heart of Seoul, it rents out to other companies because it only uses one part, it can count as the non-operating income of the company. ;business. Therefore, it is not included in the company's income, but in its net income.
It is likely that Bithumb generated its non-operating income from its direct investment in cryptocurrency, as it is possible that the company held funds in cryptocurrencies like Bitcoin and Ethereum.
A similar situation occurred with Yahoo a few years ago when they owned a large portion of Alibaba shares. As Alibaba's stock price surged, Yahoo's non-operating earnings also increased, boosting the company's balance sheet.
If Bithumb's off-farm income comes from its bitcoin investment, which is most likely the case, Bithumb will see a loss in 2018, if bitcoin fails to recover beyond $ 19,000 . Bithumb's profit in 2017 included the $ 19,000 bitcoin price spike, which reached $ 24,000 in South Korea due to local premiums.
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