Korean crypto volumes plunge as KOSPI rally draws retail

Five major won-based crypto exchanges-Upbit, Bithumb, Coinone, Korbit and Gopax-recorded a combined average daily trading volume of about $305 million in July 2026, down roughly 89% from a comparable seven-day period in July 2025. The Korea Composite Stock Price Index rose 114.44% over the 12 months to July 22, 2026.

A review comparing seven-day historical 24‑hour volume readings for July 2025 and July 2026 produced an unweighted average decline across the five platforms of about 77%, giving each exchange equal weight. On a combined basis, average daily volume fell from $2.82 billion in July 2025 to $305 million in July 2026. A separate volume reading on July 20, 2026 showed daily volumes down about 88% year‑over‑year.

Lower trading volumes have affected exchange revenues. Weaker fee income prompted some platforms to sell crypto holdings; one exchange, Korbit, sold 15 Bitcoin and 60 Ether and raised about 1.6 billion won (roughly $1 million) to support operations. Exchanges in South Korea rely heavily on trading fees, and sustained lower turnover reduces liquidity and increases pressure on smaller operators.

A market analysis report published in April attributed part of the decline to investor fatigue after repeated project failures and recurring narratives that did not produce sustained returns. The report noted that the stock market rally provided an alternative for retail traders seeking gains, contributing to a reallocation of speculative capital into equities.

The report described the domestic market as undergoing a structural transition in which retail participation is retreating while institutional interest rises. Banks and financial groups are positioning around won‑denominated stablecoins, tokenized real‑world assets and strategic stakes in exchanges. The report indicated institutional activity could replace some retail volume, but institutions are still developing strategies and infrastructure for these markets.

Market participants warned that a prolonged shift toward equities could shrink crypto liquidity and concentrate trading on larger platforms. Lower volumes generally make it harder for smaller exchanges to compete on bid‑ask spreads and market depth, which can increase the risk of consolidation in the sector.

South Korea has one of the world’s most active retail crypto communities. The contrast between the KOSPI’s 114.44% one‑year gain and the steep decline in won‑based crypto turnover helps explain why many individual investors moved capital into listed equities over the past year.

Regulators and industry observers are monitoring whether growing institutional activity can stabilise trading volumes and liquidity for won‑based crypto markets. Changes in legislation and clearer frameworks for tokenized assets and stablecoins could affect the pace of institutional participation, while any return of retail crypto activity would depend on new projects delivering sustained value and on relative returns between equities and digital assets.