Bitcoin News Update: Circuit Boards Overtake Blockchains as South Korea's New Speculation Driver

On November 11, Bitcoin was trading at a 1.75% Kimchi Premium in South Korea, reflecting a cooling crypto market as retail investors increasingly turn their attention to stocks.

This premium, a persistent feature where Korean platforms price below international rates, has shrunk as trading activity declines and speculative funds shift elsewhere, as explored in .

Since late 2024, South Korea’s crypto exchanges have experienced a significant reduction in trading. Upbit, the country’s top exchange, now handles about $1.8 billion in daily trades—down from $9 billion the previous year. Bithumb, the second-largest, has seen its liquidity drop by more than two-thirds. This downturn is exacerbated by a sharp fall in volatility, with trading ranges narrowing to $2 billion–$4 billion, compared to $5 billion–$27 billion swings in 2024. According to analytics provider Dune, active trading accounts on Korean exchanges have plunged from 280,000 daily deposits during the 2018 crypto surge to fewer than 50,000 since 2021, as discussed in

.

As crypto activity wanes, South Korea’s stock market has seen a surge in excitement, with the KOSPI index climbing 70% so far this year. Major tech firms like Samsung Electronics and SK hynix have led the rally, making up over 25% of daily trading volume. This new wave of speculation echoes the previous crypto craze, as retail investors increasingly use leveraged ETFs and margin trading to boost profits. Government initiatives under President Yoon Suk Yeol, including corporate governance reforms and incentives for higher dividends, have further propelled the stock market, as outlined in

.

At the same time, international crypto companies are setting their sights on South Korea. Singapore-based Bybit is reportedly negotiating to purchase Korbit, the nation’s fifth-largest crypto exchange, as covered in

. Such a deal could increase competition for local banks, which are still barred from digital asset services due to strict regulations. Experts point out that overseas exchanges are taking advantage of South Korea’s abundant liquidity and regulatory constraints, as noted in .

The transition from crypto to stocks marks a shift in risk-taking rather than a move away from speculation. Retail investors using leverage now account for nearly 30% of total positions, with younger traders at the forefront. However, this change has left the global crypto market without a major source of liquidity, contributing to stagnant prices for bitcoin and altcoins despite recent record highs, as described in

.

Once the driving force behind crypto’s volatility, South Korea’s retail traders are now pursuing gains in AI-focused stocks. Still, history shows they could return to digital assets if the stock market slows or a new trend arises. For now, the nation’s speculative energy has shifted from blockchains to circuit boards.