TLDR

Crypto trading volumes in South Korea have dropped by 80% in 2025.
The KOSPI index has surged over 70% in 2025, led by AI-linked stocks.
Retail investor participation in South Korea’s stock market surged 10%.
Samsung Electronics and SK hynix dominate South Korea’s AI chip sector.

South Korea, once the hub of global crypto speculation, is undergoing a major shift as its retail investors turn away from cryptocurrencies in favor of the stock market. After years of dominating crypto trading, where the “Kimchi Premium” became a national phenomenon, South Korea’s crypto markets have seen a sharp decline in trading volumes. This pivot has led retail investors to the Korean stock exchange, where a surge in AI-linked semiconductor stocks is dominating the landscape. The shift reflects a broader trend of reallocated risk appetite and speculation, now centered on machine chips and memory hardware.

Crypto Trading Decline in South Korea

South Korea’s crypto trading volumes have plummeted by nearly 80% in 2025, marking a dramatic shift in investor behavior. Popular exchanges such as Upbit and Bithumb have seen their daily transaction volumes fall significantly.

At its peak in late 2024, Upbit was handling nearly $9 billion in daily trades; by November 2025, that number had dropped to just $1.8 billion. The fall has mirrored a broader trend across Korean crypto markets, with daily trading volumes now fluctuating between $2 billion and $4 billion, compared to the wild swings of $5 billion to $27 billion just a year earlier.

The downturn in crypto trading can also be observed in the number of daily deposits. Data from Dune Analytics shows a sharp decline from 280,000 daily deposits at the peak of the crypto craze in 2018 to fewer than 50,000 in 2025. The excitement and volatility that once characterized South Korean crypto markets have largely dissipated, leaving a noticeable gap in the retail trading landscape.

Surge in Stock Market Activity

As crypto trading dwindled, South Korean retail traders quickly moved to the stock market, fueling a massive rally. The KOSPI index, the benchmark index for South Korean stocks, surged more than 70% in 2025, reaching new all-time highs.

Much of this growth is attributed to AI-linked semiconductor firms, including giants like Samsung Electronics and SK hynix, which have become key players in the global supply chain for high-bandwidth memory (HBM) chips, essential for AI training.

The rise of these companies has attracted millions of new retail investors, who have flocked to the stock market in search of the same speculative gains they once pursued in crypto. The KOSPI index’s performance in 2025 is the best in years, driven in part by the surge in AI demand. The overall market boom has not only resulted in strong stock gains but has also led to a sharp rise in the number of active trading accounts in South Korea. By the end of October 2025, the number of active trading accounts jumped from 86.57 million to 95.33 million.

A New Wave of Speculation

While the focus has shifted from cryptocurrencies to stocks, the speculative fervor in South Korea remains strong. The same retail investors who once traded in volatile crypto markets are now applying similar strategies in equities. Leveraged trading, margin lending, and the use of leveraged ETFs are all on the rise as investors seek ways to amplify their returns in the stock market.

Analysts have noted a shift in the underlying motivation for speculation. What was once driven by the desire for quick gains in digital currencies is now focused on the promise of national pride and technological advancement. With South Korea’s semiconductor industry central to global AI hardware, many retail investors view their investments in stocks like Samsung and SK hynix as both a financial and patriotic bet.

The Changing Landscape of Global Liquidity

As retail investors in South Korea move away from crypto markets, the global crypto ecosystem is feeling the effects. Korean investors had long been a major liquidity source for global crypto markets, and their departure has contributed to lower volatility and reduced trading activity worldwide. Even as Bitcoin reached new highs, the overall market sentiment has cooled, with several altcoins experiencing significant losses in recent months.

While South Korea’s crypto traders may have stepped back from digital assets, the shift to equities has ensured that retail investors are still active in speculation. This reallocation of risk suggests that the South Korean market may remain a key player in global finance, but the nature of its involvement has changed.

The post South Korea’s Retail Traders Abandon Crypto for AI Semiconductor Stocks appeared first on CoinCentral.

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Filed under: News - @ November 9, 2025 10:28 am