South Korea's financial markets are witnessing a dramatic shift: equities surging while crypto demand weakens sharply. The benchmark KOSPI has gone parabolic, hitting fresh all-time highs and climbing 37% in just 34 days after adding nearly $1 trillion in market value. According to a Bull theory post on X, the index has surged 172% over the past year, pushing closer to the key 7,000 level.
Institutional Inflow Drives Rally; Samsung & SK Hynix Get Upgrades
Strong foreign and institutional inflows, along with improving global sentiment, have fueled this rally. A rebound in U.S. tech stocks during South Korea's holiday break triggered nearly $3.5 billion in fresh buying. Major firms like Samsung Electronics and SK Hynix have seen upgraded earnings forecasts, further boosting confidence that the rally may extend. Investing to Mars, an X user, noted the rally is far from over, with potential upside target in the 8,000–9,000 range before any major correction; breaking above current channel resistance could push long-term targets even higher.
Crypto Holdings Halved; Daily Volume Plunges
Local reports indicate that while stocks surge, South Korea's crypto market is losing momentum. Total crypto holdings across major exchanges like Upbit and Bithumb dropped to 60.6 trillion won by February, down nearly half from the 121.8 trillion won peak seen earlier. Trading activity has also cooled significantly: daily volumes fell from 17.1 trillion won in late 2024 to just 4.5 trillion won, while exchange deposits—often seen as ready-to-invest capital—declined sharply. The shift suggests investors are actively reallocating funds away from crypto and into equities. Interestingly, demand for stablecoins moved in the opposite direction: holdings surged from under 100 billion won to over 600 billion won, reflecting growing interest in dollar exposure amid currency volatility.
Analysts Point to Rate Fluctuations; Rotation May Continue
NH Investment & Securities analyst Hong Sung-wook says the stock market rally and weaker crypto prices have driven capital rotation. Korbit's Kim Min-seung highlights exchange rate fluctuations as a key factor boosting stablecoin demand. The bigger picture is unfolding fast: as South Korea's stock market heats up, crypto is losing local momentum, at least for now.