Since the beginning of this year, Asian stock markets have fluctuated under the backdrop of a strong dollar, with some achieving a stock market bull run at the expense of currency depreciation, while others sacrificed part of their stock market gains with relatively stable exchange rates, with South Korea being a notable exception.
In terms of Korean won, the South Korean composite index KSOPI has fallen 10.0% this year. Considering the depreciation of the won, the KSOPI has dropped 18.9% when priced in U.S. dollars, making it the weakest in Asia. Looking at capital flows, since the second half of this year, only institutions in South Korea have maintained a net buying scale in the stock market, while the residential sector has been continuously reducing purchases.
Analysis suggests that a significant portion of the money that South Korean residents withdrew from the stock market has been used for 'crypto trading.' According to data from the Bank of Korea (BOK), as of November, the number of domestic cryptocurrency investors in South Korea has reached 15.59 million, an increase of 610,000 from the previous month. Currently, 30% of the 51 million South Koreans are engaged in crypto trading. The daily trading volume of South Korea's five major cryptocurrency exchanges—UPbit, Bithumb, Coinone, Korbit, and GOPAX—has surged from 34 trillion won in October to 149 trillion won in November, more than quadrupling. South Koreans have always been keen on investing in cryptocurrencies. During the first wave of the cryptocurrency bull market in 2017, about 5% of the population participated; in the second round of the bull market in 2021, 10% participated; and now this ratio has expanded to 30%. However, historically, the South Korean stock index and Bitcoin prices were generally positively correlated until October of this year, when this positive correlation was completely broken. (Wall Street Watch)

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