South Korean Investors Shift Focus to Crypto-Related Stocks
South Korean retail traders are increasingly turning their attention to crypto-related stocks, moving away from high-profile U.S. tech companies like Tesla. This shift comes amid a global surge in interest in digital assets, reflecting growing enthusiasm for blockchain technology and cryptocurrencies.
Declining Interest in Tesla: A Rise in Crypto Investments
Recent reports indicate a significant decline in Tesla’s popularity among South Korean retail investors. In August alone, there was a notable increase in the selling of Tesla shares, with investors redirecting their funds towards stocks linked to cryptocurrencies. Over the past four months, Tesla has experienced a $1.8 billion outflow from one of its most dedicated retail investor bases globally.
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A 33-year-old retail investor shared insights with a news outlet, explaining that Tesla’s lack of a compelling AI narrative has diminished its appeal. Having initially invested in Tesla in 2019, this trader sold their shares earlier this year, opting for equities with greater potential returns. Despite Tesla’s status as the top foreign stock among South Korean retail traders, approximately $657 million in Tesla shares were sold in August, marking the largest outflows since 2019.
In contrast, South Korean retail traders have been gravitating towards higher-risk investments, particularly those related to cryptocurrencies. During this period, investors directed $253 million into Bitmine Immersion Technologies Inc., a company associated with Ethereum (ETH). Notably, in July, South Korean investors purchased $259 million worth of Bitmine stock, making it the most acquired foreign security stock.
Surge in Crypto-Linked Equities Among Korean Investors
Data from the Korean Center for International Finance (KCIF) reveals a significant increase in the proportion of crypto-linked equities among the top 50 net-bought stocks by local retail investors. This percentage rose from 8.5% in January to 36.5% in June, before slightly declining to 31.4% in July.
The Korea Times, citing a report from 10x Research, highlighted that individuals have invested over $12 billion into crypto-related stocks in 2025. Leading the sector are companies like Bitmine, Circle Internet Group, and Coinbase. In a notable buying spree, retail investors poured $426 million into Bitmine, $226 million into Circle, and $183 million into Coinbase last month. This trend signifies a departure from previous years when Korean retail investors were primarily focused on U.S. tech giants.
The report underscores the profound impact of South Korean investors on global financial flows, noting that “Korean investors are pouring billions into crypto stocks, reshaping global flows in ways Wall Street can no longer ignore.” This surge has been further fueled by U.S. and Korean regulatory developments in the stablecoin sector.
Regulatory Developments and Their Impact on Crypto Investments
Amid increasing global interest in digital asset regulation, the institutionalization of won-pegged stablecoins has garnered significant attention. President Lee Jae-myung has pledged to address this issue alongside the status of crypto-based exchange-traded funds (ETFs) during his electoral campaign. Subsequently, multiple bills related to the issuance and distribution of KRW-pegged stablecoins have been introduced in South Korea’s National Assembly. However, concerns about the disconnect between the industry and South Korean regulators persist.
On September 1, Lee Won-eun, the nominee for Financial Services Commission (FSC) Chairman, expressed that digital assets “differ from traditional financial products like deposits and securities in that they lack intrinsic value.” In his written response to the National Assembly’s Political Affairs Committee, Lee voiced skepticism regarding certain cryptocurrency policies, including investment in virtual assets through pension and retirement accounts. This stance has raised concerns among industry players about the potential continuation of a one-sided regulatory approach.
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