A notable transformation is occurring within South Korea’s investment landscape. Over the past year, trading volumes on the nation’s leading cryptocurrency exchanges, Upbit and Bithumb, plummeted by up to 80%, as investors increasingly turn their attention to stock markets. This shift is largely attributed to the impressive performance of the KOSPI index, driven by prominent semiconductor manufacturers such as Samsung Electronics and SK hynix.
The Move Away from Crypto
Once the epicenter of global cryptocurrency trading, South Korea witnessed a rapid decline in crypto activities by 2025. Wu Blockchain reports indicated that Upbit’s daily trading volume fell from $9 billion at the close of 2024 to a modest $1.8 billion by November. Similarly, Bithumb experienced a significant loss in liquidity. Dune Analytics further highlighted a persistent decrease in deposit transactions, dwindling from 280,000 daily transactions in 2018 to fewer than 50,000 since 2021.
Despite the downturn in crypto trading, South Korean investors have redirected their financial strategies with vigor. The KOSPI index, showcasing a remarkable rally, climbed over 70% within the year. October alone witnessed a record-breaking monthly performance for the index, achieving 17 new highs. This surge is supported by substantial trading volumes from tech giants Samsung and SK hynix, which contribute significantly to the market’s turnover.
What Drives the New Investment Focus?
The propensity for speculation remains unchanged among South Korean traders, who are now channeling their efforts into the booming semiconductor sector. SK hynix and Samsung stand at the forefront, capitalizing on the growing demand for high-bandwidth memory (HBM) technology essential for AI advancements. This shift has been propelled not only by innovation in tech but also by government initiatives aiming to moderate the South Korea Premium, boost dividends, and enhance corporate governance.
A Bloomberg analysis reveals a substantial 30% of investor positions are now leveraged. The popularity of margin credits and leveraged ETFs has surged, marking a departure from the illiquid cryptocurrency market. Although Bitcoin remains near $100,000, numerous altcoins have experienced depreciations exceeding 20% recently, steering South Korean risk-takers toward more stable arenas like the stock market.
“As the market evolves, our strategy has adapted to harness the potential of the semiconductor industry,” shares a prominent South Korean brokerage firm.
– Upbit’s trading volumes reduced by $7.2 billion over the year.
– Bithumb saw two-thirds of its liquidity dissipate.
– KOSPI index marked a 70% rise in 2025.
– SK hynix and Samsung account for 25% of the stock market’s trading volume.
– Leveraged positions among individual investors stand at 30%.
Adaptability has characterized South Korean investors, shifting their strategies from cryptocurrencies to technology stocks, specifically within the semiconductor market. This transition underscores their dynamic approach to navigating changing economic landscapes, reinforced by government support and a robust tech sector poised for future growth.
