Billions in Bitcoin: Why Dunamu and Bithumb Stocks Remain Stagnant Despite Crypto Windfall

Although the virtual asset market is revitalizing, with Bitcoin (BTC) exceeding 100 million won again, the prices of the country’s first and second largest exchanges are showing no signs of recovery.

According to Securities Plus unlisted on the 4th, the stock price of Upbit operator Dunamu is currently recording 100,000 won. Even though Upbit’s trading volume increased by about 1 trillion won in the fourth quarter, its stock price is not much different from the previous quarter. In particular, when Bitcoin exceeded 100 million won early this year, it rose to the 140,000 won range, but now that it has hit 100 million won again, the stock price is not moving.

The same goes for Bithumb. Earlier this year, it rose to 165,000 won due to the rise of Bitcoin and expectations of an initial public offering (IPO), but it is currently around 90,000 won. Even though the coin price has recently risen and transactions have increased, the stock price has remained the same. Market share has also steadily increased since the fourth quarter, nearly doubling from before, but the stock price remains unchanged.

The stock prices of both companies have been going downhill ever since they peaked three years ago when the virtual asset market was booming. At the end of 2021, Dunamu and Bithumb stock prices hit all-time highs of 540,000 won and 780,000 won, respectively.

Since they are all unlisted stocks, the stock price does not fully reflect the market value due to low trading volume and infrequent trading frequency. However, despite expectations for improvement in industry conditions and performance, there is no change in the stock price, increasing investors’ disappointment.

Accordingly, many people are of the opinion that the stock price is undervalued, but some predict that it will be difficult for the stock price to rise significantly in the future, considering the business environment and growth potential of virtual asset exchanges.

The domestic virtual asset market, which is centered on individual investors, has faced limitations in expansion, and exchanges have few new businesses outside of their main businesses, so the future growth prospects are not bright. In addition, if new markets such as spot exchange-traded funds (ETFs) open in the future, there is a high possibility that they will compete with existing financial institutions.

The second stage of the bill, following the Virtual Asset User Protection Act, is also expected to be unfavorable to exchanges. The second stage of the bill is expected to include △ stablecoin regulation △ measures to resolve conflicts of interest in the process of issuing and distributing virtual assets △ regulations on virtual asset evaluation and disclosure, etc. △ establishment of unified standards for the circulation and issuance volume of virtual assets.

An industry official said, “With the second phase of legislation, discussions have begun on corporate investment and ETFs, so there are expectations for market expansion, but the new legislation will eventually create new regulations.” “There is a high possibility that it will shrink further,” he predicted.

An official from the financial sector also said, “Institutionalization is accompanied by balanced growth of the industry and market, and the period when virtual asset exchanges monopolized the market and raised corporate value will now be over.” “When ETFs and corporate investments are opened, the exchanges will benefit more.” “It is highly likely that it is an existing financial institution,” he said.