Korea Dumps Crypto for Stocks? KOSPI Hits Record as Crypto Volume Collapses 80%

Core Insights - South Korea's KOSPI index reached record highs in early November, while crypto trading volumes plummeted over 80%, indicating a significant shift in investor sentiment towards traditional equities [1][2][5]. Group 1: KOSPI Performance - The KOSPI index surged to an all-time high, with a year-to-date increase of 71.8%, making it the top-performing major stock index globally [5]. - Daily trading volume for KOSPI hit KRW 34.04 trillion, a 208% increase from KRW 11.05 trillion on January 2, 2025 [3]. - The rally in the KOSPI has been driven by strong performances from major companies like Samsung Electronics and SK Hynix, with their shares rising approximately 95% and 242% year-to-date, respectively [5][9]. Group 2: Crypto Market Decline - The daily trading volume on South Korea's five major crypto exchanges fell to KRW 5.57 trillion, a 45% decrease from January 2025 when volumes exceeded KRW 10 trillion [4]. - Upbit, the largest crypto exchange in South Korea, reported a 12.8% drop in 24-hour trading volume to $2.02 billion as of October 31, 2025, reflecting a declining interest in digital assets [6]. - CryptoQuant data indicated that trading volumes on these exchanges collapsed to near-zero levels, contrasting sharply with early 2025 highs above 240 billion units [4]. Group 3: Market Influences - The stock market rally began in May 2025, coinciding with the Presidential election campaign, which was marked by the anticipated victory of opposition leader Lee Jae-myung [7][8]. - Lee Jae-myung's market-friendly policies and rhetoric during the campaign have contributed to heightened investor optimism, leading to the KOSPI's record performance [8].