Investment trends in South Korea have changed markedly recently. The country, which has long had a strong retail investor base in the digital asset market, is now going through a period where the interest of domestic investors is increasingly shifting to stocks. The sharp rises seen especially in artificial intelligence and semiconductor companies seem to have attracted a significant part of the capital, which was previously directed towards cryptocurrencies, to the Stock Exchange Seoul.
Sharp contraction in the crypto market
South Korea remained the world’s second-largest market for retail crypto activity in the first quarter of 2026, according to data from TRM Labs, which works in blockchain intelligence. The USA ranked first with 212 billion dollars. However, the country’s high ranking did not overshadow the contraction in transaction volume.
TRM Labs data revealed that South Korea remains second globally in retail crypto activity, but transaction volume is down 28% from the previous year.
According to the same data, cryptocurrency transaction volume in South Korea decreased by 28% compared to last year. This rate was recorded as the sharpest decline among major global markets. Compared to the 20% decline in the global average, the contraction in the country appears to be deeper.
Mini glossary: TRM Labs is an intelligence company that examines transaction flows on blockchain networks and provides data and analysis on digital asset markets.
South Korea has long been considered one of the important centers of the crypto market due to its high-tech infrastructure, investor profile open to price volatility and intense individual participation. Some projects in the sector identified the country as one of the prominent markets in terms of liquidity in the past.
Momentum strengthened in stocks
In response to the slowdown in the crypto market, the South Korean stock market showed a strong rise. The country’s indicator index KOSPI has gained approximately 196% in value in the last year. This performance has made the index one of the strongest stock market indicators among G20 countries.
The rapid rise in artificial intelligence and semiconductor stocks has turned the attention of investors, who previously preferred crypto for high volatility, to domestic stocks.
Strong movements in artificial intelligence and semiconductor-focused companies accelerated the change in investor preferences. The traction offered by crypto assets, which have stood out with their sharp daily price fluctuations in the past, has recently become more visible in traditional stocks.
| entity or indicator | Period | Change |
|---|---|---|
| South Korea crypto trading volume | Annual | -28% |
| Global average crypto volume | Annual | -20% |
| KOSPI | Last 1 year | +196% |
While Bitcoin rose 4.7% on a recent trading day, large-cap domestic technology stocks gained more sharply. SK hynix increased by 6.42% and Samsung Electro-Mechanics increased by 16.63%. This table reveals why investors looking for short-term returns are turning to the stock market more.
Crypto assets generally exhibited a more horizontal outlook after the peak at the end of 2025. For this reason, the risk appetite of individual investors in South Korea may have shifted to areas offering higher momentum rather than disappearing.
