Korean stocks plummeted to persuade retail investors to retreat, and Upbit's turnover soared 436% in one day
By Claude, Deep Wave TechFlow
Original title: Korean stocks plummeted to persuade retail investors to leave? Upbit's turnover soared 436% in one day, and the return of funds to the coin industry accelerated
Guide to Deep Tide: Korea's KOSPI Index once again triggered a fusing mechanism on July 13. Samsung Electronics and SK Hynix plummeted by more than 7% and 12% respectively, and the index had a cumulative retracement of more than 20% from its peak on June 19. Retail investors began to vote with their feet: According to Coingecko data, South Korea's largest exchange, Upbit's turnover soared to US$4.12 billion in nearly 24 hours, an increase of 436% in a single day. The top five trading currencies were BTC, XRP, ETH, T, and BLAST in that order.
The South Korean stock market's sharp decline for nearly a week is driving retail capital towards the crypto market.
On July 13, the KOSPI index opened and fell 63.91 points to 7,412.03. The intraday decline continued to expand. At 10:34 a.m., KOSPI 200 futures fell by more than 5%, triggering the 18th temporary suspension of sellers' trading (sidecar) this year. When triggered, KOSPI was at 7.162.21, down 4.20% from the previous trading day.
Samsung Electronics fell more than 7.72% on the same day, and SK Hynix plummeted by more than 12%. SK Square (SK Hynix's largest shareholder) fell 15%, and Samsung Electric fell 17%.
KOSPI retreated more than 20% from its peak, and the semiconductor supercycle faced a crisis of trust
KOSPI has entered technical adjustments from the intraday high of 9,385 on June 19, with a cumulative retracement of more than 20%.
The degree of volatility of the Korean Exchange in 2026 has surpassed the 2008 financial crisis. Up to now, the Korea Exchange has triggered nearly 30 sidecars and multiple meltdowns this year, breaking the historical record of 26 sidecars in 2008.
Together, Samsung Electronics and SK Hynix account for about half of KOSPI's market capitalization, and the two almost determine the direction of the index's rise and fall. eToro market analyst Zavier Wong previously pointed out that the two stocks had about a quarter of their weight in the index at the end of last year and have now risen to about half. Any large fluctuation will drive the entire index before the remaining 900 or more listed companies have had time to respond.
SK Hynix's “exhaustion of benefits” compounded lower profit expectations, dragging down the entire semiconductor sector
SK Hynix just listed ADR on NASDAQ on July 10. First-day trading surged 12.8%, raising about $26 billion for the company. However, in the Seoul market three days later, the stock price experienced a classic correction of “buying news and selling facts.”
Korea Investment Securities analyst Choi Min-suk released a report on July 13, predicting SK Hynix's operating profit for the second quarter to be 60.4 trillion won, which is about 8% lower than the market consensus of 65 trillion won. Her explanation was that SK Hynix's HBM (high-bandwidth memory, high-speed storage technology supporting the AI chip core) sales share higher than that of competitors, causing its average price growth rate to be lower than the industry average.
This reduction in expectations is particularly lethal in the current environment. Li Jingmin, an analyst at Daxin Securities, pointed out that KOSPI's forward-looking price-earnings ratio has fallen to the level of the 2008 global financial crisis due to excessive concentration of semiconductors, leveraged investment liquidation, and supply and demand shocks. However, he also mentioned that current valuations have entered the undervalued range, and even a slight positive catalyst could trigger a rapid rebound.
However, other voices in the market expressed caution about this. KOSPI's “Buffett Index” (market capitalization to GDP ratio) reached 221% in June, far higher than the average of 70.2% between 2000 and 2025, which suggests there is still room for valuation adjustments.
Upbit's turnover soared 436%, and capital flowed back from the stock market to the crypto market
According to Coingecko, Upbit's 24-hour turnover reached US$4.12 billion, an increase of 436%. The top five trading currencies are Bitcoin, XRP, ETH, T (Threshold Network), and BLAST in that order.
The move of Korean retail investors from the stock market to the coin industry is nothing new. This rebound is highly consistent with the screenplay from previous rounds of KOSPI's sharp decline. Previously, during KOSPI's decline in May, XRP had become the most traded crypto asset on Upbit and Bithumb, surpassing Bitcoin and Ethereum in a single day.
Tiger Research analyst Ryan Yoon attributed this phenomenon to a group of retail investors aged 40 to 50 in South Korea. They are withdrawing funds from Korean domestic stocks and US stocks to the crypto market. XRP is the preferred target.
The South Korean crypto market actually experienced five consecutive weeks of contraction prior to this sharp rise in turnover. From July 3 to 10, the total turnover of Korea's top five Korean won exchanges (Upbit, Bithumb, Coinone, Korbit, Gopax) was 9.9676 trillion won, down 25.75% from the previous week, to less than 10 trillion won for the first time since September 2023.
The turnover explosion on July 13 can be said to be a centralized release during this period of contraction and momentum. In terms of trading types, Threshold (T) and BLAST appeared in the top five transactions, reflecting the speculative inertia of Korean retail investors preferring small to medium capitalization altcoins. According to Bitcoin Sistemi data, T's 24-hour turnover on Upbit reached US$68.27 million, with a total turnover of around US$76.75 million on the Korea Exchange.
The seesaw effect of the Korean stock market and the currency industry: a trading logic that is being continuously verified
South Korea is one of the few markets in the world where retail capital is being massively switched between the stock market and the crypto market. Up to now, more than 16.2 million people in South Korea have crypto accounts, accounting for about 32% of the total population, and the number of crypto holders has surpassed stock investors. According to Chainalysis data, South Korea has accumulated over $722 billion in crypto asset value, making it the second-largest recipient of crypto assets in the world after the US.
According to public data, from July 13 to 19, stablecoin trading volume on the five major exchanges in South Korea reached 2.226 trillion won (about 1.62 billion US dollars). The high trading enthusiasm of South Korean investors began to show when they frantically bought XRP on July 11th.
According to previous rules, aggressive increases in Korean retail positions are usually concentrated within 1 to 3 trading days after KOSPI plummets, after which the popularity of trading gradually declines as the stock market stabilizes. Investors need to be aware that if KOSPI is supported at current levels, the crypto market's “spillover” funds could retreat just as quickly.
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