Why Have Korea's Crypto Enthusiasts—the World's Most Avid Traders—Exited the Market?

Original Author | Liam, TechFlow

Original Source Link:

https://mp.weixin.qq.com/s/rsBEu16L3x6J0uUVeMoa0w

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South Korean Retail Traders Are Putting Down Memecoins and Picking Up AI Chip Stocks. If you had to name the people most obsessed with trading crypto, South Koreans would definitely make the list.

South Korea has long been one of the most fanatical crypto markets in the world. The market even coined its own term — the “Kimchi Premium” — to describe how bitcoin in Korea once traded as much as 10% higher than global prices.

But by 2025, the wind has shifted.

Trading volume on Upbit, South Korea’s largest crypto exchange, is down about 80% year-on-year. The BTC/KRW pair is nowhere near as active as it used to be. Meanwhile, the Korean stock market is on fire — the KOSPI index is up more than 70% this year, hitting fresh all-time highs.

On KakaoTalk and Naver forums, the retail traders who used to talk altcoins every day are now all discussing “AI semiconductor plays.” The crypto ghost story has arrived: even Koreans aren’t really degen-ing in crypto anymore.

Crypto volumes have been chopped in half — Koreans aren’t trading like before

For years, South Korea was the battlefield everyone in crypto wanted to win.

Exchanges and token teams loved the market because Korean users were high-value, high-conviction, and — to put it bluntly — often the final bid on small-cap altcoins.

Media and even K-dramas have shown Koreans staying up all night trading, getting rich, then getting liquidated.

So if someone told you that retail in this “nation of crypto traders” has basically cooled off, it might sound absurd.

But the numbers don’t lie. Trading on Upbit, Korea’s biggest exchange, has fallen off a cliff.

In November 2025, Upbit’s average daily volume was just $1.78 billion — compared with $9 billion in December 2024, that’s an 80% crash, and it’s been falling for four straight months.

The average daily trading volume of Upbit for each month over the past year

Upbit actually peaked on Dec 3, 2024 — the night martial law was declared in Korea — with a mind-bending $27.45 billion in daily volume, about 10x normal traffic.

But that blow-off night was the top. After that, the market cooled fast and volumes fell off a cliff.

What’s more interesting: volatility in volume also collapsed.

At the end of 2024, during the frenzy, daily volume swung wildly between $5–27 billion. But in 2025, most days sat in a much tighter $2–4 billion band, showing traders just weren’t aping in and out like before.

Bithumb, Korea’s No. 2 exchange, followed the same path.

In Dec 2024 Bithumb averaged about $2.45 billion a day. By Nov 2025 it was down to roughly $890 million — a drop of about 69%, meaning it’s lost nearly two-thirds of its liquidity.

The average daily trading volume of Upbit for each month over the past year

Both of South Korea’s largest domestic exchanges — Upbit and Bithumb — have slipped into a simultaneous “volume recession” over the same period. That doesn’t just signal weaker trading activity; it shows retail sentiment in Korea has broadly pulled back.

Search data backs this up. In Korea’s Google Trends, the latest search index for “Bitcoin” is 44 — a 66% drop from the peak level of 100 seen at the end of 2024.

Korean stocks are in full-on bull mode

So where did Korean retail money go? Into equities.

This year’s Korean stock market basically feels like a rerun of the 2017 Bitcoin bull — just on KOSPI. It’s been an epic, blowout rally.

The KOSPI benchmark index set intraday all-time highs 17 times in October alone, pushing through the 4,200 level. Just in October, it jumped nearly 21%, the best single month since 2001.

Year-to-date, KOSPI is up more than 72%, outperforming pretty much every major asset class.

In October, average daily trading value on KOSPI hit 16.6 trillion won (about $11.5 billion), with a single-day peak of 18.9 trillion won — up 44% from September. Brokerage apps even lagged from the traffic.

And that’s just the index. Individual names were even wilder.

Samsung Electronics has doubled so far this year. Memory giant SK hynix climbed 70% this quarter alone and is up 240% year-to-date. Together the two names traded 4.59 trillion won a day, accounting for 28% of the entire market.

Exchanges thought it was getting out of hand. On Monday night, Korean exchanges issued an “investment caution” notice on SK hynix because the stock was rising too fast — and that directly triggered a selloff in SK hynix on Tuesday.

AI has become a “national belief”

For years, the Korean stock market was basically flat — more than a decade of going nowhere. Local media kept saying “there’s no future in Korean equities,” so a lot of Korean investors went to crypto or U.S. stocks instead. So why did the Korean market suddenly reverse course in 2025?

Korea’s stock market may look like “retail went crazy,” but the logic behind this leg up is actually pretty clean:

global AI boom + policy tailwind + domestic capital coming home.

Everyone in the market knows the spark this time was AI.

ChatGPT ignited season 2 of the global tech bubble, and Korea just happens to be sitting right where the ammo is.

Korea is the world’s memory stronghold — SK hynix and Samsung Electronics basically dominate the HBM (high-bandwidth memory) market, and HBM is the key ingredient for training AI foundation models.

That means whenever Nvidia or AMD ships more GPUs, Korean companies’ profit curves rip higher in sync.

At the end of October, SK hynix reported Q3 revenue of $17.1B and operating profit of $8B, up 62% YoY — both record highs.

More importantly, SK hynix has already locked in customer demand for all DRAM and NAND capacity through 2026 — it’s pure supply shortage.

So Koreans suddenly realized: AI may be America’s story, but the money is being made in Korea.

If Nvidia is the soul of U.S. tech stocks, Korean retailers have found their own totem in SK hynix. They’re still chasing that “10x dream” they used to chase in altcoins — except now, buying Samsung or SK also comes with a patriotic aura.

And there’s one more piece people shouldn’t overlook: the Korean government is actively propping up the stock market.

For a long time, Korean equities have suffered from what’s known as the “Korea Discount.”

Chaebol-style family control, messy corporate governance, and weak shareholder returns meant Korean companies were chronically undervalued. Even Samsung Electronics had traded below global peers for years, and even after SK hynix rallied 240%, it was still only on about 14x earnings.

After President Yoon Suk-yeol took office, his administration rolled out what’s been called a “Korean-style shareholder value revolution,” which mainly targets that discount:

● pushing companies to raise dividends and do more buybacks;

● cracking down on cross-shareholding among chaebols;

● cutting capital gains taxes and encouraging pensions and retail investors to allocate more to domestic assets.

Local media framed this as a “national campaign to get rid of the Korea Discount.”

As a result, foreign capital started to flow back, and domestic institutions and retail traders also “came home” to buy Korean stocks.

Of course, there’s also a simpler reason: there aren’t many good places to park money. The housing market has cooled under high rates, U.S. stocks look expensive, and in crypto Koreans often end up as the exit liquidity. Investors needed a new table to play at — and the stock market happened to offer a legal, policy-supported casino.

According to the Bank of Korea, over 5 million new brokerage accounts were opened by local retail investors in the first half of this year, and brokerage apps saw a surge in downloads.

This rush of money into KOSPI has actually been faster than the retail FOMO into crypto in 2021. At the same time, Korean pension funds and insurers are also adding to domestic tech names.

From the state to institutions to retail, everyone is piling into equities — you could almost call it a “nationwide, state-backed bull market.”

Speculation never sleeps

Unlike crypto, where things are often pulled up purely by “vibes,” this Korean equity bull market at least has some earnings behind it.

But we still have to admit one thing:

what’s happening on the KOSPI is, at its core, a nationwide bout of emotional resonance. Koreans haven’t changed — they just switched tables. They don’t just like to bet, they like to bet with leverage.

According to Bloomberg, Korean retail investors have been aggressively levering up, pushing margin loan balances to roughly double over five years, and piling into high-leverage and inverse ETFs.

Citing Gelonghui data for 2025:

● margin / leveraged funds used by retail now account for 28.7% of total positions, up 9% from last year;

● positions in 3x leveraged products jumped from 5.1% to 12.8%;

● among 25–35-year-olds, the leverage usage rate is 41.2%.

This cohort basically comes with a built-in “all-in” gene.

But once Korean retail collectively migrates to the stock market, a very crypto-specific question pops up: “If Koreans aren’t buying alts anymore… who’s the exit liquidity?”

For the past few years, Korea has often been the final buyer of altcoin mania. From DOGE to PEPE, from LUNA to XRP — every parabolic phase had Korean retail footprints in it. They were the market’s ultimate sentiment gauge: as long as Korea was still buying, the bubble wasn’t done.

Now, with Upbit and Bithumb volumes collapsing, crypto has lost its last group of true believers — and with them, its strongest fuel. Altcoins now face a very simple problem: no one left to catch the bag.

Maybe we’ll have to wait until this global AI-stock craze cools down, or until crypto can spin up a story big enough to drag retail back in. When that happens, the sleeping gamblers will wake up, open their wallets, and come back on-chain.

Because the gamblers were never gone —

they just found a hotter casino for a while.

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