South Korea's Crypto Boom Is Fading

Crypto trading activity in South Korea has fallen sharply relative to the country's stock market, underscoring how quickly sentiment can shift in one of Asia's most active retail trading hubs.

According to data cited by Digital Asset, combined trading volume across South Korea's five licensed crypto exchanges, including Upbit and Bithumb, equalled just 8% of KOSPI trading volume in May 2026. The contrast with late 2024 is stark: at the peak of the post-election rally fuelled by Donald Trump's victory, that ratio stood at 323% in December 2024.

From Euphoria to Retreat

The December 2024 surge was itself a dramatic moment for Korean markets. Upbit's historical peak occurred on December 3, 2024, the night of Korea's declaration of martial law, when daily trading volume reached $27.45 billion, ten times the usual amount. That spike proved to be the high-water mark. Data from CryptoQuant shows a dramatic drop in daily trading volume, from KRW 17.1 trillion in late 2024 to just KRW 3.2 trillion by mid-2025, an over 80% decline. This plunge came even as Bitcoin's price rose globally.

The collapse in activity also affected the so-called "Kimchi Premium," a market phenomenon where crypto prices in Korea trade higher than global averages. As volume thinned, that premium faded, further reducing speculative appeal.

Capital Rotates Into Stocks

The retreat from crypto has coincided with a surge in South Korean equities. The Korean stock market has been booming, with the KOSPI index surging over 70% in 2025, continuously hitting record highs. The surge has been driven by momentum in domestic stocks, particularly Samsung Electronics and SK Hynix, powered by the new administration and investor enthusiasm for artificial intelligence.

The stock market rally had real consequences for crypto. As equities rose, liquidity from Korean retail investors shifted away from crypto, with many moving their funds into stocks. The trend is visible across the exchange landscape. Leading exchange Upbit saw the most severe volume decline of approximately 82%, with activity dropping from 271.6 trillion won to 49.0 trillion won. Bithumb experienced a 74% decrease, moving from 91.9 trillion won to 23.6 trillion won.

Regulatory pressure has added to the headwinds. South Koreans moved more than 160 trillion won ($110 billion) from local crypto exchanges to foreign platforms in 2025 due to regulatory restrictions. The main reason cited is the gap in investment opportunities, as South Korea prohibits domestic exchanges from offering crypto derivatives to retail traders, while foreign platforms fill this gap with more complex products including leveraged derivatives.

Whether the slowdown marks a lasting structural shift or a cyclical lull remains an open question. Some analysts argue the lower volumes reflect a maturing market moving away from hyper-speculation, while others point to the stock market rally as a temporary diversion of retail attention that could reverse in the next crypto cycle.

Sources:
BeInCrypto: KOSPI Smashes Records as Crypto Volume Tanks 80%
CoinDesk: $110B in Crypto Left South Korea in 2025
Disruption Banking: Korea's Crypto Crash, 80% Volume Drop and Won160T Exodus