Key Takeaways
- Bank of Korea data shows domestic virtual asset holdings fell over 50% to $41.17 billion by February 2026.
- Investors shifted capital to booming stock markets as bitcoin trading volumes crashed by 70% in early 2026.
- High exchange rates will likely drive further demand for dollar-pegged Stablecoins through late 2026.
Massive Capital Migration to Stocks
The value of virtual assets held by domestic investors in South Korea has plummeted by more than $41 billion (60 trillion won) over the last year, as a cooling crypto market prompted a mass migration of capital toward traditional equities. According to Bank of Korea data reportedly submitted May 10 to Rep. Cha Kyu-keun of the Rebuilding Korea Party, the total valuation of domestic virtual assets stood at approximately $41.17 billion as of the end of February.
The decline marks a staggering reversal from the market’s peak in January 2024, when holdings reached $82.76 billion. In just over 12 months, the total value of these digital portfolios has been slashed by more than half. The retreat from the crypto sector is further evidenced by a sharp contraction in trading volume and liquidity.
According to a local report, during the period under review, average daily trading volume, which surged to $11.62 billion in December 2024, fell to just $3.06 billion by February 2025. Won-denominated deposits—often viewed as “waiting funds” for future crypto purchases—dropped from $7.27 billion in late 2024 to $5.30 billion in February.
Analysts attribute this exodus to a “perfect storm” of a bullish global stock market and a simultaneous downturn in major cryptocurrencies like bitcoin. While the broader crypto market faced a sell-off, stablecoins saw a significant rise in popularity.
Holdings of stablecoins reached a high of $592.7 million in December 2024. Although that figure dipped to $412.5 million by February, the sector has still seen its value more than double compared to July 2024 levels, when holdings were a mere $60.1 million.
Meanwhile, financial experts quoted in the report suggest the surge in stablecoin demand is driven by South Koreans seeking dollar-based assets to hedge against high exchange rates and market volatility.
“The shift reflects an overall decline in valuation and a pivot toward more stable, interest-bearing domestic and international stock markets,” the report noted.
