From Crypto Frenzy to Trading Freeze: South Korea’s Sharp Market Reversal
SEOUL, Feb. 2 (Korea Bizwire) — South Korea’s cryptocurrency market is rapidly losing favor with investors as capital flows decisively toward a booming stock market, reversing a trend that once saw digital assets eclipse equities in trading volume.
According to data from CoinGecko, the country’s largest crypto exchange, Upbit, ranked just 26th globally in 24-hour trading volume as of Saturday evening, with about $1.86 billion traded. That marks a steep fall from last year, when Upbit routinely placed among the world’s top four exchanges alongside Binance. Other domestic platforms fared worse, with Bithumb ranking 46th and several smaller exchanges falling outside the global top 100.
The downturn contrasts sharply with late 2024, when domestic crypto exchanges collectively recorded monthly trading volumes of more than 540 trillion won—nearly double the combined turnover of the Kospi and Kosdaq. That surge followed the election of U.S. President Donald Trump, which fueled expectations of pro-crypto policies and triggered a wave of speculative inflows.
Since early 2025, however, the balance has flipped. As global cryptocurrency prices weakened, enthusiasm for South Korean equities intensified. On Jan. 30, the combined 24-hour trading volume of the country’s five major crypto exchanges amounted to roughly 5 trillion won, less than 10 percent of the day’s turnover on the Kospi and Kosdaq.
Cryptocurrency price display board. (Image courtesy of Yonhap)
Price declines have been broad-based. Bitcoin was trading more than 30 percent below its October peak, while major alternative coins such as Ethereum and XRP have fallen by more than 40 percent and nearly 50 percent, respectively. By contrast, heavyweight stocks like Samsung Electronics and SK hynix have repeatedly set record highs, buoyed by strong earnings and investor optimism. South Korea’s total stock market capitalization recently climbed into the world’s top 10, surpassing Germany, according to Bloomberg.
Market analysts say the shift highlights a growing substitution effect between crypto assets and equities, as investors chase whichever market offers stronger momentum. The reversal has also prompted renewed debate over South Korea’s cautious regulatory stance toward digital assets, including its reluctance to approve spot Bitcoin exchange-traded funds.
“For a few months, money flowed overwhelmingly into crypto; now it is rushing into stocks,” one industry official said. “As the cycles diverge, investors are treating the two markets less as complements and more as alternatives.”
Ashley Song (ashley@koreabizwire.com)
