South Korea’s crypto liquidity has taken a steep drop, with stablecoin balances coming down to 55% since July 2025. On-chain data tracked by Allium Labs across Ethereum and Tron wallets tied to Upbit, Bithumb, Coinone, Korbit, and GOPAX shows combined holdings dropping from about 575 million dollars in July to roughly 188 million dollars by mid-March 2026.
Sharp drop in crypto liquidity
The drop came in mid-March when the Korean won broke past 1500 per dollar, reaching 16-year lows not seen since the 2008 financial crisis. Traders sold stablecoins at those increased USD-KRW levels, moving capital into domestic assets. According to DNTV Research founder Bradley Park, the weaker currency strongly incentivized investors to exit dollar-denominated positions.
Government policies have sped up this shift by launching special accounts, often called repatriation or return to inland accounts. These give investors up to a full 100% exemption on capital gains tax if they sell overseas assets and reinvest the money back into local Korean markets, usually for at least one year.
Government policies accelerate the shift
The KOSPI index, which is already up 75% in 2025, has climbed another 37% so far in 2026, making it the world’s best-performing major stock index with the rally heavily concentrated in Samsung Electronics and SK Hynix which together account for roughly half the market capitalization and more than half of projected profits and serve as the main destination for both retail and institutional flows.
Broader stablecoin transaction volumes across Asia have actually increased over the past year, according to Artemis data, indicating the Korean exchange outflows represent domestic capital rotation rather than any region-wide pullback from crypto.
This shift shows a clear loss of influence, as money isn’t sitting idle anymore; it’s being actively moved into stocks. Whether these flows return to crypto will likely depend far more on how long the Korean stock boom lasts than on any developments within the crypto space itself.
