South Korea crypto volume falls below 10 trillion won for first time since 2023

Weekly crypto trading volume across South Korea’s five largest won-based exchanges fell to approximately 9.97 trillion won ($6.65 billion) between July 3 and July 10, the lowest level in nearly two years and the first reading below 10 trillion won since September 2023, as investors pulled back amid a sharp correction in the KOSDAQ.

South Korea crypto volume records lowest level in two years

The latest figures show South Korea crypto volume has continued its downward trajectory for a fifth consecutive week.

According to data shared by Wu Blockchain, weekly trading across Upbit, Bithumb, Coinone, Korbit, and Gopax totaled approximately 9.97 trillion won between July 3 and July 10. That represents a 25.75% decline from the previous week’s 13.4 trillion won ($8.9 billion).

The downturn extends beyond a single week. Current South Korea crypto volume is roughly 43.5% lower than levels recorded in early June, underscoring the pace at which trading activity has cooled.

Wu Blockchain summarized the trend in a post on X:

The prolonged decline suggests retail investors have become increasingly cautious after months of weakening market sentiment.

Several structural challenges have also weighed on activity. During the first quarter of 2026, combined exchange volumes had already begun falling significantly, with Bithumb reporting a decline of more than 30%.

Confidence was further tested following an operational error at Bithumb earlier this year, while new regulations limiting exchange ownership stakes encouraged a more defensive approach among retail investors. Together, those factors have contributed to the sustained contraction in South Korea crypto volume.

KOSDAQ crash intensifies pressure on South Korea crypto volume

The slowdown in South Korea crypto volume has unfolded alongside one of the sharpest corrections in South Korea’s stock market in recent years.

Over the past nine weeks, the KOSDAQ index has fallen 31%, wiping out nearly an entire year’s worth of gains. The decline approaches the severity of the 2020 market crash, when the index dropped 32% within five weeks.

Global Markets Investor highlighted the scale of the sell-off on X.

“The KOSDAQ index of small-cap technology stocks has dropped -31% over the last 9 weeks, erasing nearly one year of gains.” — Global Markets Investor, X

Meanwhile, the benchmark KOSPI index has declined 20% in just three weeks, pushing it into technical bear-market territory.

The synchronized weakness is not unexpected. South Korean retail investors have historically traded both technology stocks and cryptocurrencies, frequently rotating capital between the two markets. When confidence weakens in equities, speculative activity in digital assets often declines as well.

As a result, the stock market correction has become a major driver behind falling South Korea crypto volume, reflecting a broader reduction in investor risk appetite.

AI concerns and tighter oversight reshape investor sentiment

Much of the recent volatility has centered on the artificial intelligence sector.

Investor enthusiasm surrounding AI-related companies has softened amid growing uncertainty over semiconductor demand and future chip spending. Heavyweight firms such as Samsung and SK Hynix, together with leveraged exchange-traded funds, account for more than 70% of traded market value, amplifying swings across the broader market.

In response, South Korea’s finance minister announced tighter oversight of leveraged single-stock ETFs, acknowledging the concentration risks associated with those investment products.

The changing investment landscape has also attracted attention overseas.

The Kobeissi Letter noted growing investor interest in semiconductor-focused investment vehicles, stating:

“The Memory ETF, $DRAM, has surpassed $25 billion in assets under management (AUM) for the first time.” — The Kobeissi Letter, X

While regulators seek to reduce systemic risks, the additional oversight has reinforced investor caution, encouraging capital to move into more defensive assets.

Analysts see rotation rather than a permanent retreat

Despite the sharp contraction in South Korea crypto volume, analysts do not necessarily view the decline as evidence that investors are abandoning digital assets altogether.

Instead, some believe trading activity may be shifting toward decentralized exchanges, smaller cryptocurrency platforms, or traditional financial markets as investors search for alternative opportunities.

However, declining liquidity on the country’s largest exchanges presents its own challenges. Lower trading volumes generally result in wider bid-ask spreads, increased price volatility, and reduced fee income for exchange operators.

Whether South Korea crypto volume rebounds in the coming weeks will likely depend on broader market conditions, investor confidence in both equities and digital assets, and the impact of ongoing regulatory measures.