South Korea's Crypto Boom Fades as Trading Volume Drops 28%

South Korea remains one of the world's largest cryptocurrency markets. Trading volume fell 28% year over year, marking one of the steepest declines among major economies. Retail investors have shifted toward domestic equities, particularly AI and semiconductor stocks.

The decline hits the country's two dominant exchanges, Upbit and Bithumb. Together they control more than 90% of domestic spot volume. Lower monthly trade figures directly reduce their fee income. Operating costs for licensing and compliance, set by the Financial Services Commission, have not changed.

What happened? Korean retail traders are famous for chasing momentum. In 2021, they drove the "kimchi premium" – the price gap between crypto assets on domestic and global exchanges – to extremes. That premium has since faded. The recent AI rally in equities offered a logical alternative. The KOSPI, heavily weighted toward Samsung Electronics and SK Hynix, climbed on artificial intelligence demand. Individual investors increased net purchases of semiconductor and AI-related stocks.

Crypto did not disappear from the radar. Bitcoin and Ethereum still trade actively on Korean platforms. The marginal flow that previously lifted altcoins such as XRP and Dogecoin is now going to stocks. Those altcoins, which often trade at a multiple on Korean exchanges versus global markets, have seen their local premiums shrink.