South Koreans have stopped trading cryptocurrencies! Trading volume is down to 8% of the KOSPI stock market, and the K-pop premium has turned negative.

The numbers are brutal. South Korea's cryptocurrency trading volume was 323% of the stock market last year, but this year it's down to only 8%! It has shrunk 40 times in 18 months. The days when South Korean retail investors were frantically speculating in cryptocurrencies are gone forever.

Retail investors are chasing semiconductor stocks.

South Korean media outlet Digital Asset tracked trading volume changes across five major South Korean won trading platforms (Upbit, Bithumb, Coinone, Korbit, and Gopax), noting that the crossover between crypto and stock markets began last fall.

In August 2025, crypto trading volume was still on par with KOSPI (99% ratio), but the next two months saw a complete divergence: a wave of futures liquidations in October crippled the crypto, while semiconductor stocks surged, propelling KOSPI to new highs. Since then, Korean won crypto trading volume has evaporated by 70%, while KOSPI has surged nearly 2.5 times.

KOSPI's rebound has been astonishing. At the beginning of the year, it plummeted 20% amid geopolitical turmoil, triggering two circuit breakers. However, thanks to a super-rebound in the semiconductor sector led by Samsung and SK Hynix, it rebounded to a record high in less than four months. This V-shaped reversal completely drew South Korean retail investors' attention away from the crypto.

Dunamu's latest financial report directly confirms this ebb tide. The parent company of Upbit reported Q1 revenue of 234.6 billion won, a year-on-year decrease of about 55%, and operating profit plummeted by 78%. South Korean retail investors' risk appetite hasn't disappeared; it's just shifted its focus. Instead of discussing Altcoin on Kakao Talk, they are now chasing AI semiconductor concept stocks.

Kimchi premium remains negative

Looking at the global picture, the exodus of South Korean retail investors is equally evident. CryptoQuant's Bitcoin "kimchi premium" metric, which measures the price difference between the South Korean and international markets, turned negative starting in March, briefly returned to positive territory in April, and then fell back down again.

A negative premium for Bitcoin (BTC) in South Korea indicates that the price of BTC in South Korea is lower than on overseas exchanges, suggesting extremely weak buying pressure. This situation is historically quite rare, having only occurred during the Terra-Luna crash in June 2022 and the FTX collapse in November 2022. The consecutive months of negative premiums indicate not only a decline in speculation but also a fundamental shift in the buying structure of the South Korean market.

It's not that South Koreans have stopped gambling; they've just switched gambling tables. The hardships South Korean young people face in their pursuit of quick profits could fill a long article.

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