South Korea crypto volume jumps 82% amid KOSPI selloff

Trading volume on South Korea's major cryptocurrency exchanges surged dramatically this week as a historic selloff in the country's stock market sent investors scrambling for alternative venues. The spike, which saw daily volume jump 82 percent to approximately 964 billion won on July 28, highlighted the close link between traditional equity volatility and crypto market activity in one of Asia's most active retail trading hubs.

The surge was concentrated in stablecoin trading, particularly between the Korean won and Tether (USDT) on the dominant exchange Upbit. Data showed Upbit's KRW-USDT trading volume soared nearly 600 percent, rising from about 20 million USDT on July 25 to approach 200 billion won, or roughly 140 million USDT, on July 29. Rival exchange Bithumb also saw its volume increase 438 percent on July 28. This activity coincided with a steep decline in South Korea's benchmark KOSPI index, which fell more than 20 percent over five days amid a semiconductor stock selloff, triggering market circuit breakers and erasing an estimated 864 trillion won in value between July 28 and 29.

Analysts offered several explanations for the correlation. Some suggested capital rotated...