South Korea’s KOSPI Near 6,937 as Stock Surge Drains Crypto Liquidity

South Korea’s financial markets are seeing a dramatic shift, with equities surging while crypto demand weakens sharply. The benchmark KOSPI has gone parabolic, hitting a fresh all-time high and climbing 37% in just 34 days after adding nearly $1 trillion in market value. According to the Bull theory X post, over the past year, the index has been up an impressive 172%, pushing closer to the key 7,000 level.

This rally has been fueled by strong foreign and institutional inflows, along with improving global sentiment. A rebound in U.S. tech stocks during South Korea’s holiday break triggered nearly $3.5 billion in fresh buying. 

At the same time, major firms like Samsung Electronics and SK Hynix have seen upgraded earnings forecasts, further boosting confidence that the rally may extend.

According to an X user, Investing to Mars the KOSPI rally is still far from over. The index continues to surge higher, with a potential upside target in the 8,000–9,000 range before any major correction kicks in. The outlook could turn even more bullish if KOSPI breaks above its current channel resistance, which may push long-term targets even higher.

Crypto Weakens as Funds Rotate

However the local report, says while stocks surge, South Korea’s crypto market is losing momentum. Total crypto holdings across major exchanges like Upbit and Bithumb have dropped to 60.6 trillion won by February, down nearly half from the 121.8 trillion won peak seen earlier.

Trading activity has also cooled significantly. Daily volumes fell from 17.1 trillion won in late 2024 to just 4.5 trillion won, while exchange deposits, often seen as ready-to-invest capital, declined sharply as well. The shift suggests investors are actively reallocating funds away from crypto and into equities.

Interestingly, demand for stablecoins is moving in the opposite direction. Holdings surged from under 100 billion won to over 600 billion won, reflecting growing interest in dollar exposure amid currency volatility.

Analysts say the trend is clear. According to NH Investment & Securities analyst Hong Sung-wook, the stock market rally and weaker crypto prices have driven capital rotation. Meanwhile, Korbit’s Kim Min-seung points to exchange rate fluctuations as a key factor boosting stablecoin demand.

The bigger picture is unfolding fast: as South Korea’s stock market heats up, crypto is losing local momentum, at least for now.