- Trading across South Korea’s leading cryptocurrency exchanges has fallen sharply while the KOSPI has enjoyed a strong year, highlighting a shift in retail investment activity.
- Lower trading volumes are reducing fee income for exchanges, with some platforms reportedly selling digital assets to offset weaker revenue.
- Researchers believe institutional participation and emerging digital asset initiatives could help reshape the market as retail enthusiasm cools.
South Korea’s cryptocurrency market has experienced a steep decline in trading activity as retail investors increasingly favour the country’s booming share market over digital assets.
Analysis of trading data from the nation’s five largest won-based cryptocurrency exchanges found combined average daily trading volume fell to US$305 million (AU$442.25 million) from US$2.82 billion (AU$4.09 billion) over comparable seven-day periods in July 2025 and July 2026, representing an overall decline of about 89%. An equal-weighted comparison across the exchanges showed an average year-on-year drop of roughly 77%.
The shift has coincided with a strong rally in South Korea’s benchmark KOSPI index, which climbed 114.44% in the 12 months to 22 July despite easing from its June peak. Analysts said the contrasting performance suggests retail investors are directing more speculative capital towards equities.
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Lower Trading Takes its Toll
Weaker trading volumes are placing pressure on exchange revenues because local platforms rely heavily on transaction fees. Reports indicate some exchanges have responded by selling digital asset holdings, with Korbit reportedly raising about 1.6 billion won through the sale of 15 Bitcoin and 60 Ether, equivalent to about US$1 million (AU$1.45 million).
Research cited in the analysis said the slowdown reflects more than softer cryptocurrency prices. Repetitive market narratives, disappointing projects and stronger opportunities in equities have contributed to retail investor fatigue.
Despite weaker retail participation, researchers described the market as undergoing a structural transition, with financial institutions positioning for opportunities including won-backed stablecoins, tokenised real-world assets and exchange investments as the regulatory framework develops.
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