- South Korea’s crypto trading volume has dropped sharply by about 80% since late 2024.
- Retail investors have shifted their focus from cryptocurrencies to the Korean stock market, especially semiconductor stocks.
- The KOSPI index surged over 70% in 2025, boosted by AI-related companies like Samsung Electronics and SK hynix.
- Government reforms have supported the stock market rally by improving governance and investor incentives.
- Leveraged trading and retail participation in equities have increased significantly, indicating continued high risk appetite.
South Korea has witnessed a significant shift in investor behavior throughout 2025. The once vibrant crypto trading scene, led by exchanges like Upbit and Bithumb, has seen a sharp decline in activity. Average daily crypto trading volume on Upbit plummeted by nearly 80%, falling from about $9 billion in late 2024 to $1.8 billion by November 2025. Bithumb experienced a similar reduction, losing over two-thirds of its liquidity, according to data from Wu Blockchain. Volatility has shrunk as well, with daily volumes moving in a narrow $2 billion to $4 billion range, compared to swings between $5 billion and $27 billion in the past.
As cryptocurrency trading quieted down, retail investors redirected their speculation to the Korean stock market. The KOSPI index surged more than 70% year-to-date in 2025, with October registering a 21% gain and 17 new intraday records. This rally is concentrated in AI-related technology firms, notably Samsung Electronics and SK hynix, which together account for over 25% of daily market turnover. Data from the Korea Times showed active trading accounts rose from 86.57 million at the start of 2025 to 95.33 million by October 31.
The stock market rally is underpinned by the global AI growth trend. Korean companies dominate the supply chain for critical AI hardware components like high-bandwidth memory (HBM), essential for AI system training. The government has supported this momentum through reforms aimed at reducing the “Korea Discount,” enhancing corporate governance, increasing dividends, and providing incentives for both retail and institutional investors under President Yoon Suk Yeol’s administration.
Speculation continues at a fast pace with leveraged trading on the rise. Leveraged Exchange-Traded Funds (ETFs) are popular, and retail leverage accounts for nearly 30% of total stock holdings, driven largely by younger investors, according to Bloomberg data. This shift from cryptocurrencies to equities reflects a reallocation of risk appetite rather than a withdrawal from speculative investing.
The retreat of Korean retail traders from crypto markets has led to diminished global crypto liquidity. Bitcoin currently trades near $100,000 despite having hit an all-time high a month ago, while many altcoins have declined by over 20% recently. However, the return of Korean traders to crypto could occur should AI interest fade or a new crypto narrative emerge, as discussed in reports like this BBC article. For now, retail investors pursue excitement in semiconductor stocks rather than digital coins.
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