South Korea's cryptocurrency trading activity has significantly decreased compared to the stock market, highlighting the rapid shift in market sentiment in this active retail trading hub in Asia. According to data cited by Digital Asset, in May 2026, the total trading volume of the five major legal cryptocurrency exchanges in South Korea (including Upbit and Bithumb) accounted for only 8% of the KOSPI trading volume. This starkly contrasts with the situation at the end of 2024: during the post-election rebound driven by Donald Trump's victory, this ratio reached 323% in December 2024.
From Frenzy to Retreat
The surge in December 2024 was a dramatic moment for the South Korean market. Upbit's historical peak occurred on the night of December 3, 2024, when South Korea announced the implementation of martial law, with a trading volume of $27.45 billion, ten times the normal level. This peak became the high point. Data from CryptoQuant indicates that daily trading volume plummeted from 171 trillion won at the end of 2024 to 32 trillion won by mid-2025, a decline of over 80%. Even as Bitcoin's global price rises, this collapse in trading activity continues.
The collapse in trading activity has also affected the so-called “kimchi premium,” a market phenomenon where cryptocurrency prices in South Korea are higher than the global average. As trading volumes decreased, this premium weakened, further diminishing the allure of speculation.
Funds Shift to Stocks
The retreat from cryptocurrencies coincides with a boom in the South Korean stock market. In 2025, the South Korean stock market performed strongly, with the KOSPI index rising over 70%, continually setting new highs. This increase was primarily driven by the momentum of domestic stocks, particularly Samsung Electronics and SK Hynix, buoyed by the new government's initiatives and investor enthusiasm for artificial intelligence.
The rebound in the stock market has had a tangible impact on cryptocurrencies. As stock prices rose, liquidity from South Korean retail investors shifted from cryptocurrencies to stocks, with many reallocating their funds to the stock market. This trend is evident in the exchange sector. Leading exchange Upbit saw the most significant decline in trading volume, approximately 82%, with volumes dropping from 271.6 trillion won to 49 trillion won. Bithumb's trading volume also decreased by 74%, from 91.9 trillion won to 23.6 trillion won.
Increased regulatory pressure has also added headwinds. In 2025, South Koreans transferred over 160 trillion won (approximately $110 billion) from local cryptocurrency exchanges to overseas platforms due to regulatory restrictions. The primary reason is the disparity in investment opportunities, as South Korea prohibits domestic exchanges from offering cryptocurrency derivatives to retail traders, while foreign platforms fill this gap with more complex products, including leveraged derivatives.
Whether this decline marks a lasting structural change or is merely a cyclical downturn remains an open question. Some analysts believe that the lower trading volumes reflect market maturity, gradually moving away from excessive speculation, while others point out that the stock market rebound may only be a temporary diversion of retail attention, with a potential reversal in the future.