The value of cryptocurrency held by South Korean investors dropped from 121.8 trillion won at the end of January 2025 to 60.6 trillion won by the end of February 2026 — a decline of more than 50% in just over a year. Daily trading volumes across the country's five major exchanges fell even more sharply, dropping from $11.6 billion at the end of December 2024 to $3 billion by the end of February 2026. Won deposits held at exchanges, which serve as a proxy for investor dry powder sitting on the sidelines ready to be deployed, also contracted from 10.7 trillion won at the end of 2024 to 7.8 trillion won, suggesting that capital is leaving the crypto ecosystem rather than simply waiting for better entry points. The decline is attributed to a combination of falling crypto prices across the market and capital rotation into the Korean stock market, which has been buoyed by strong demand for AI-related memory chips from Samsung and SK Hynix. South Korea had established itself as the world's second largest fiat-to-crypto market earlier in 2026, with won-denominated trades accounting for 30% of global spot crypto volume — making the scale of this contraction significant not just domestically but as a signal about retail participation trends in one of the world's most active crypto markets.

One notable exception to the broader decline was stablecoins, which bucked the trend in a way that reveals something meaningful about investor behavior during market downturns. Stablecoin holdings among Korean investors climbed from $60 million at the end of July 2024 to a peak of $597 million at the end of December 2025, before easing to approximately $415 million by February 2026 — a far smaller proportional decline than the broader crypto market. That pattern suggests a portion of Korean investors rotated into stablecoins rather than exiting crypto entirely, maintaining optionality to re-enter the market while avoiding the volatility of spot positions. The stablecoin growth also reflects the global trend of increasing stablecoin adoption for payments and value preservation beyond pure trading activity, and in South Korea's case may be partly driven by the expanding availability of regulated stablecoin products following the GENIUS Act framework's influence on global regulatory approaches.