According to the latest data from the Bank of Korea, the total value of virtual assets held by South Korean domestic investors has plunged by more than $41 billion (60 trillion won) over the past year, as the cooling crypto market triggered a massive capital migration toward traditional equities. The data, submitted on May 10 to lawmaker Cha Kyu-keun, showed that the total valuation of domestic virtual assets stood at approximately $41.17 billion by the end of February 2026—down from a peak of $82.76 billion in January 2024.
Trading Volume and Collateral Deposits Collapse
The downturn is not limited to holdings value. Daily average trading volume, which hit $11.62 billion in December 2024, plummeted to just $3.06 billion by February 2025—a staggering 73.7% decline. Won-denominated deposits, often regarded as “war chests” for future crypto purchases, fell from $7.27 billion at end-2024 to $5.30 billion by February. Analysts attribute the exodus to a “perfect storm” of a booming global stock market and simultaneous declines in major cryptocurrencies like Bitcoin. While the overall crypto market faced a sell-off, stablecoins recorded a significant surge in popularity.
Stablecoin Holdings Surge Amid Flight to Safety
Stablecoin holdings peaked at $592.7 million in December 2024. Though they fell to $412.5 million by February 2025, the figure still marked a more than six-fold increase compared to July 2024 levels (just $60.1 million). Financial experts cited in the report suggest that rising demand for stablecoins is driven by South Koreans seeking dollar-based assets to hedge against high exchange rate volatility and market uncertainty. “The shift reflects a general decline in valuation and a turn toward more stable, interest-yielding domestic and international equity markets,” the report noted.
Bitcoin Drops Below $80,000; ‘Kimchi Premium’ Reappears
Under the weight of macroeconomic and sentiment factors, Bitcoin tumbled below the $80,000 mark. Meanwhile, South Korean exchanges saw the reappearance of a nearly 2% “Kimchi Premium” for Bitcoin—the first such occurrence since the pre-war market shock. The premium is typically seen as a barometer of local market sentiment, suggesting that despite massive capital outflows, some short-term traders are still exploiting arbitrage opportunities.
According to the Bank of Korea, high exchange rates are likely to fuel further demand for dollar-pegged stablecoins through the remainder of 2026. Analysts forecast that if equity markets continue their strong run, the capital outflow from crypto may persist, while stablecoins will remain the go-to hedge against currency volatility for South Korean investors.