South Korea’s Biggest Cryptocurrency Exchange Posts 171x Revenue Spike in 2017
Bithumb, South Korea’s largest cryptocurrency-to-fiat exchange, has increased its revenue 171-fold in 2017.
BTCKorea, the parent company of Bithumb, is a public company that is being traded on South Korea’s stock exchange KRX. It is required to publicly release its earnings and given that its only subsidiary company is Bithumb, the revenue and profit margins of BTCKorea are automatically that of Bithumb.
According to Coindesk Korea, Bithumb has increased its revenue by 171-fold in 2017, in comparison to its revenue in 2016. Bithumb takes 0.15 percent of every order as its operating fee, and the fee model remains as the main revenue stream of the cryptocurrency exchange.
In 2017, especially in its fourth quarter, the trading volume of South Korean cryptocurrency exchanges rose exponentially, as the demand for cryptocurrencies like bitcoin and Ethereum skyrocketed. Leading cryptocurrency trading platforms were sold at high valuations and the stock prices of publicly listed cryptocurrency exchanges surged. Korbit, the third biggest cryptocurrency trading platform in South Korea, was acquired for $150 million.
In 2017, Bithumb recorded a net income or profit of $420 million but recorded a revenue of 330 million. Investors in the public market were taken aback by the absurd numbers relayed by Bithumb, given that its net income was higher than its revenue, which is not possible in most cases unless the company makes substantial income outside of its main revenue model.
During an interview with Coindesk Korea, Bithumb representative stated that the company has made a profit of $90 million outside of its main business model and its cryptocurrency trading platform as non-operating income. Bithumb hinted that this may have been generated from office rental, interest rates, and investment gains.
“The details of Bithumb’s balance sheet will only be finalized on March 30, in a board meeting. As such, it is difficult to confirm any details of the company’s balance sheet in early April. Bithumb will likely introduce details of its earnings in late April,” said Bithumb.
Often, non-operating income comes from companies with properties that are being rented out to other individuals or businesses. For example, if Bithumb has a commercial building in the heart of Seoul it rents out to other businesses as it only uses a part of it, it can count as the company’s non-operating income. Hence, it is not included in the revenue of the company, but in its net income.
It is likely that Bithumb generated its non-operating income from its direct cryptocurrency investments, 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 held a big chunk of Alibaba shares. As the price of Alibaba stock surged, Yahoo’s non-operating income increased as well, boosting the company’s balance sheet.
If the non-operating income of Bithumb came from its bitcoin investment, which is most likely the case, Bithumb will see a loss in 2018, if bitcoin fails to recovery beyond the $19,000 mark. The 2017 earnings of Bithumb included bitcoin’s price spike to $19,000, which hit $24,000 in South Korea due to local premiums.
Featured image from Shutterstock.
Written by CCN.com
‘Bitcoin Day’ Proves Argentina’s Crypto Love Is Alive and Well
Bitcoin may not yet have “conquered” Argentina, but it’s certainly making in-roads.
That much was obvious last week at “Bitcoin Day” in Buenos Aires, where 500 attendees took part in an event aimed at serving a growing demand for information on the technology. Held in the heart of the city’s Almagro neighborhood, the conference served a reminder of how the country is still the leader in regional adoption, even if other developments in Latin America (like Colombia’s possible petro cryptocurrency) may have stolen the spotlight of late.
For example, Chile’s Guillermo Torrealba, CEO of the cryptocurrency services firm Buda, contrasted his efforts to achieve banking support in Argentina with experiences elsewhere.
“There are even banks here that have executives that are exclusively dedicated to cryptocurrency companies,” Torrealba said. Compared with his home country, the situation, he said, is night and day.
“In Chile last week, all commercial banks have decided to close the accounts to all the cryptocurrency companies at the same time. They killed the industry,” he told CoinDesk.
Still, that’s not to say there isn’t optimism that other countries will follow in Argentina’s progressive footsteps.
Torrealba expects government or judicial intervention to ultimately end the blockade, asserting that countries like Peru are already pursuing a different strategy, seeking to observe and learn.
“We believe that it is not long before the traditional financial industry will come looking for us in order to begin to use our infrastructure,” he said.
But in Argentina, that might already be happening.
Gonzalo Blousson, CEO of digital notary startup Signatura, for one, acknowledged progress is being made. Already, Argentina is registering official bulletins on the blockchain, a development he credits to a vibrant local community that has been evangelizing for the tech for years.
He told CoinDesk:
“We used to call the companies to tell them what blockchain is about. Today they call us to improve their processes.”
The new enemy
That said, there was a significant amount of interest in another question – if and when the bitcoin price (down more than 60 percent on the year) would begin to rise again.
For this, a talk by Carlos Maslaton, head of treasury at Xapo, satisfied, with dialogue on how financial entities are wary of bitcoin because it “generates competition” in the financial markets.
But he notably went on to urge banks to “open their minds a little,” suggesting that the crowd in attendance was reason enough that bitcoin and cryptocurrencies are, if nothing else, a new market for their services. (Maslaton said he wasn’t expecting such a strong turnout after the decrease of bitcoin price.)
Still, if Maslaton doesn’t see banks as the enemy, he believes bitcoin still has regional threats.
Asked by a Venezuelan about his opinion on the petro cryptocurrency, he went so far as to call it a “fraud.”
“No currency of these characteristics can be issued by a government. Precisely the idea of cryptocurrencies is that it they are not to be issued by a government,” he said, adding:
“In the hands of Maduro and the criminals who run Venezuela, what else can I say…”
Images via Bitcoin Day organizers
Written by CoinDesk.com
Bitcoin Mining Manufacturer Canaan May Seek an IPO in Hong Kong or the US
Canaan Rules out IPO on Chinese Stock Exchanges?
Canaan Creative Co. Ltd, the Chinese company behind the Avalon lineup of hardware equipment which produces ASIC mining chips and rigs, is reportedly considering launching an initial public offering (IPO) in Hong Kong or the US markets.
The company has faced difficulties with getting its stocks listed on mainland Chinese marketplace in the past and now feels that the process in its home country is just too long. Co-chairman Jianping Kong said: “We … prefer listing outside mainland China as we are in a global business.” Canaan also claims that the harsh approach toward bitcoin taken by the government has nothing to do with its decision to look abroad. Kong added that they may later pursue a secondary listing in China by issuing depository receipts.
Besides a potential IPO, the company which reportedly brought in over 1 billion yuan in revenues last year, has further expansion plans. N.G. Zhang, Canaan founder and CEO, revealed that he employs around 200 in Beijing and Hangzhou, mostly in R&D, and is looking to hire more.
Canaan might use its chip development know-how and capabilities to create an unexpected new lineup of products. These can include home appliances such television sets that mine cryptocurrencies “while you sleep.” Other developments include chips to power artificial intelligence (AI) applications and of course new hardware for mining other cryptocurrencies such as litecoin.
The manufacturer is expected to benefit from the Chinese government’s initiative to promote local technology companies to rid its economy of its dependence on foreign suppliers at a time of growing international tensions and talk of trade wars. “As an integrated circuit company, we are supported by government policies,” Kong commented.
Written by Bitcoin.com