South Korea's cryptocurrency trading volume has plummeted significantly, with retail investors shifting their funds to the stock market to chase the KOSPI index.

BlockBeats News, July 22nd. The trading volume of major cryptocurrency exchanges in South Korea has seen a significant drop over the past year, while the South Korean stock market continues to rise, indicating that some retail speculative funds are shifting from the crypto market to the stock market.

Data shows that the trading activity on South Korea's top five Korean won exchanges — Upbit, Bithumb, Coinone, Korbit, and Gopax — has noticeably decreased. Comparing the 7-day trading data from July 2025 and July 2026, the average daily trading volume of the five exchanges has dropped by around 77% year-on-year.

In terms of overall trading volume, the average daily trading volume of the five exchanges has dropped from approximately $2.82 billion in the same period last year to about $305 million, a decrease of around 89%. South Korean media outlet ZDNet Korea previously reported that as of July 20th, the daily trading volume on the top five Korean exchanges had dropped by about 88% year-on-year.

Meanwhile, the South Korean benchmark stock price index KOSPI has seen a cumulative increase of about 114% over the past year. Despite a slight pullback from its peak in June, the strong stock market performance continues to attract significant retail investor attention.

South Korea has long been one of the most active retail cryptocurrency markets globally, with exchanges heavily reliant on trading fees for revenue. With the decrease in trading volume, some exchanges are facing revenue pressure. Korbit has even sold some of its crypto assets, including 15 BTC and 60 ETH, to raise about 16 billion Korean won (approximately $1 million).

Research firm Tiger Research believes that the cooling of the South Korean crypto market is not only due to price factors but also related to investor fatigue with repetitive narratives and unrealized projects. At the same time, the rise of KOSPI has provided a new speculative channel for retail investors.

However, the firm points out that South Korean investors have not completely lost interest in crypto assets but rather the market is undergoing a structural transformation: a decrease in retail participation while institutional funds are focusing on areas such as Korean won stablecoins, Real-World Asset (RWA) tokenization, and exchange platform investments.

Analysts believe that if the South Korean stock market continues to attract inflows, it may further weaken cryptocurrency market liquidity in the short term and intensify the operational pressure on small and medium exchanges.