South Korean retail investors have shifted their focus from US big tech shares to virtual asset-related stocks, especially those linked to stablecoins, according to a report by the Korean Center for International Finance.

The report found that the share of virtual asset-related stocks among the top 50 net-bought overseas stocks by South Korean individuals rose from 8.5% in January to 36.5% in June, before dipping to 31.4% in July.

Net purchases of the top seven US big tech stocks fell from a monthly average of US$1.7 billion between January and April to US$440 million in May, US$670 million in June, and US$260 million in July.

The KCIF said interest in stablecoin-related shares grew after the US passed the GENIUS Act in July, which introduced regulations for the stablecoin sector.

South Korean retail investors became net sellers of overseas stocks in May and June, returning to net buying in July with US$499 million, much lower than the earlier monthly average of US$3.8 billion.

The KCIF cited a stronger local stock market and currency as factors behind the shift.

.source-ref{font-size:0.85em;color:#666;display:block;margin-top:1em;}a.ask-tia-citation-link:hover{color:#11628d !important;background:#e9f6f5 !important;border-color:#11628d !important;text-decoration:none !important;}@media only screen and (min-width:768px){a.ask-tia-citation-link{font-size:11px !important;}}

🔗 Source: Yonhap

🧠 Food for thought

1️⃣ South Korea’s massive retail crypto adoption amplifies regulatory responses

The shift in South Korean investment patterns reflects one of the world’s most concentrated retail cryptocurrency markets.

Nearly 32% of South Korea’s population, over 16 million people, now invest in virtual assets, with total holdings reaching approximately $71.5 billion as of late 202412.

This represents a significant level of retail participation, with nearly 10 million South Koreans holding accounts on major cryptocurrency exchanges, marking a 52.6% increase from the previous year2.

The scale helps explain why South Korean investors responded quickly to U.S. stablecoin regulation. When a large portion of the population is active in crypto investments, regulatory changes that legitimize digital assets can create immediate market effects.

The concentration is particularly notable when compared to traditional markets. The average digital asset holding accounts for 14% of South Koreans’ overall financial portfolios, indicating significant integration into personal finance planning3.

2️⃣ Regulatory clarity creates cross-border investment momentum

The GENIUS Act’s impact on South Korean investors demonstrates how regulatory frameworks in major markets can redirect global capital flows.

The Act established comprehensive oversight for U.S. stablecoin issuers, requiring 1:1 reserve backing and federal licensing, which created new legitimacy for stablecoin-related investments4.

This regulatory clarity appears to have triggered the sharp increase in South Korean purchases of virtual asset-related stocks, rising from 8.5% to 36.5% of their top overseas investments between January and June[article].

The timing correlation suggests that institutional-grade regulation can rapidly shift investor confidence, even across international boundaries.

The pattern reflects how regulatory uncertainty often constrains institutional and retail investment, while clear frameworks can unlock previously hesitant capital.

……