In a significant market transformation, South Korea's retail investors are rapidly moving away from cryptocurrencies to focus on AI semiconductor stocks, leading to a nearly 80% decline in crypto trading volumes in 2025. This shift marks a dramatic change from the country's previous dominance in global crypto speculation, where the 'Kimchi Premium' was a notable phenomenon.
Data reveals that the KOSPI index, South Korea's benchmark stock index, has surged over 70% this year, driven largely by AI-linked companies such as Samsung Electronics and SK hynix. These firms are key players in the high-bandwidth memory (HBM) chip sector, essential for AI training. Concurrently, retail investor participation in the stock market increased by 10%, with active trading accounts jumping from 86.57 million to 95.33 million by the end of October 2025.
Major cryptocurrency exchanges like Upbit and Bithumb have experienced substantial downturns. Upbit's daily trading volume, which peaked at nearly $9 billion in late 2024, fell to just $1.8 billion by November 2025. Overall daily crypto trading volumes in South Korea now fluctuate between $2 billion and $4 billion, compared to the volatile range of $5 billion to $27 billion a year earlier. Additionally, daily crypto deposits plummeted from 280,000 at the 2018 peak to fewer than 50,000 in 2025, according to Dune Analytics.
The speculative fervor once associated with crypto has transferred to equities, with investors employing leveraged trading, margin lending, and leveraged ETFs to amplify returns. Analysts note that motivations have shifted from seeking quick gains in digital currencies to embracing national pride and technological advancement through investments in semiconductor stocks. This reallocation has cooled global crypto market sentiment, contributing to reduced volatility and liquidity, even as Bitcoin reached new highs, with several altcoins facing significant losses.
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