South Korea’s Crypto Trading Plummets to Just One-Tenth of Stock Market Volume
May 27, 2026 — By Olivia Stephanie
South Korea is witnessing a significant downturn in cryptocurrency trading activity, with crypto volumes dropping to only 8% of the country’s stock market trading volumes in May 2026. This sharp decline reflects a remarkable reversal from late 2024, when crypto trading outpaced stock market activity by a substantial margin.
Crypto Trading Vs. Stock Market: A Widening Gap
According to data compiled by market analytics firm Digital Asset, the combined cryptocurrency trading volume across South Korea’s five major exchanges—Upbit, Bithumb, Coinone, Korbit, and Gopax—has fallen dramatically compared to the Korean Composite Stock Price Index (KOSPI). By May 26, 2026, crypto trading accounted for less than one-tenth of KOSPI’s activity.
The decline began following a downturn in the digital asset markets in October 2025. While cryptocurrency volumes contracted sharply, the KOSPI index consistently climbed to record highs, propelled by strong investor demand, particularly within the booming semiconductor sector.
From Peak to Plummet: Crypto’s Rapid Fall
Back in December 2024, South Korea’s crypto market experienced a euphoric surge when won-based crypto trading volume surged to 323% of KOSPI’s volume. This rally was fueled in part by optimism surrounding the U.S. political landscape, notably Donald Trump’s presidential win, and his declared agenda to "make the United States the capital of digital assets."
However, this momentum did not endure domestically. Between August 2025 and May 2026, traded crypto volume in won fell by a staggering 71%, while KOSPI’s trading volume rose by 243%, underscoring diverging fortunes in the two markets.
Weaker Local Demand and the Kimchi Premium
Further insights into South Korea’s waning crypto interest come from the Bitcoin Korea Premium—also known as the Kimchi Premium—which measures the price difference of Bitcoin between South Korean and international exchanges. Typically, a positive premium indicates strong local demand.
Data from CryptoQuant, referenced by Digital Asset, reveals the premium has remained negative throughout several recent sessions in 2026. This suggests Bitcoin is trading for less on South Korean platforms than abroad, reflecting subdued domestic trader demand compared to global markets.
This persistent negative premium highlights that the crypto market’s difficulties are not simply a matter of reduced trading volume but also a fundamental lack of buying pressure in Korea.
Regulatory and Market Influences Driving the Shift
The shrinking crypto market coincides with increased regulatory pressure from South Korean authorities. New measures are being introduced that will tax virtual asset gains exceeding 2.5 million won starting January 1, 2027, at an expected combined rate of 22%. The National Tax Service is working closely with major exchanges to implement comprehensive tax reporting guidelines, with the first full filing due by May 2028 for 2027 earnings.
In addition, the government is tightening oversight on overseas asset transfers, requiring greater reporting on transactions involving foreign exchanges and private wallets. Industry stakeholders have raised concerns over potential delays and increased costs linked to these regulations.
Falling Deposits and Holdings Confirm Downtrend
Supporting the narrative of waning interest, crypto holdings in South Korea have more than halved—from $83.3 billion at the end of January 2025 to $41.4 billion by February 2026. Daily trading volumes across the major exchanges dropped from approximately $11.6 billion in December 2024 to around $3 billion by early 2026. Won deposits on platforms decreased as well, shrinking from 10.7 trillion won at the end of 2024 to 7.8 trillion won by February 2026. —
Conclusion: Crypto’s Struggle Amid Surging Equities
South Korea’s crypto market has endured a rapid and pronounced retreat amid a concurrent surge in stock market enthusiasm. The combination of falling local demand, negative Bitcoin premiums, and tightening regulations underscores a challenging environment for digital assets domestically. As cryptocurrencies face these headwinds, domestic investors appear to be favoring the traditional stock market, which has benefited from industry growth and state support.
For ongoing updates on cryptocurrency trends and stock market developments in South Korea and beyond, stay tuned to crypto.news.