South Korea's Cryptocurrency Trading Volume Decreased by About 89% Year-on-Year, Retail Funds Shift to Stock Market
The trading activity of South Korea's five major won trading platforms has significantly declined over the past year, with average daily trading volumes on Upbit, Bithumb, and others dropping by about 77%. Overall trading volume fell from approximately $2.82 billion in the same period last year to about $305 million, a decrease of about 89%.
Meanwhile, the KOSPI, South Korea's composite stock price index, has risen by about 114% over the past year, attracting a large number of retail investors; some trading platforms are under pressure from reduced fee income, with Korbit even selling 15 BTC and 60 ETH to raise about $1 million.
Market mechanisms show that retail speculative funds are shifting from cryptocurrency to the stock market, leading to reduced liquidity on crypto platforms and decreased fee income, while stock-related brokerages, listed companies, and institutions benefit; institutional funds are moving towards stablecoins, RWA tokenization, and other areas, driving the transformation of the Korean crypto market from retail dominance to structural institutional layout.
Source: Public Information
ABAB AI Insight
South Korea has long been one of the most active retail cryptocurrency markets globally, contributing significant trading volumes during the bull markets of 2017-2018 and 2021. This outflow of funds continues the historical behavior of retail investors chasing hot trends, similar to past shifts between the real estate and stock markets.
In terms of capital flow, retail funds are moving into the stock market as the KOSPI rises, forcing crypto platforms to sell assets to maintain operations, while institutional capital is focusing on compliant products like stablecoins and RWA, reallocating resources from high-risk retail speculation to low-frequency institutional allocations.
Similar to the cooling of the Korean crypto market after the 2018 ICO bubble while the stock market warmed up, or the multiple migrations of Japanese retail funds between crypto and stocks, the Korean market is currently in a transitional phase with decreasing retail participation and gradual institutional takeover.
This fundamentally represents a concentration of capital and a transfer of pricing power: high returns in the stock market attract retail attention, while shrinking retail liquidity in crypto accelerates pressure on smaller platforms, and institutional funds concentrate on compliant innovations, reshaping the pricing and profit structure of the Korean crypto market.
ABAB News · Cognitive Law
When retail hot money rotates quickly, liquidity in old tracks dries up first.
Stock market rises are the most direct signal of outflow of crypto funds.
During periods of retail fatigue, institutional layouts often determine the next structural phase.