Korean retail investors reshape US crypto-related stock markets

A man walks past a cryptocurrency exchange store in Hong Kong, December 2024. Reuters-Yonhap

Korean individual investors, who have long been active in cryptocurrency investments, are expanding their reach by making significant investments in crypto-related stocks listed in the U.S., data showed Sunday.

This year, retail traders in Korea have snapped up more than $12 billion worth of shares in U.S.-listed crypto firms such as Bitmine, Circle Internet Group and Coinbase, according to 10x Research, a digital asset research firm.

In August alone, Korean investors bought $426 million in Bitmine, $226 million in Circle Internet Group and $183 million in Coinbase. They also funneled $282 million into a 2x Ether ETF — a leveraged exchange-traded fund designed to deliver twice the daily return of Ethereum.

"Korean investors are pouring billions into crypto stocks, reshaping global flows in ways Wall Street can no longer ignore," 10x Research noted in a recent report. "The push has been amplified by U.S. and Korean stablecoin legislation, creating a powerful backdrop for this surge in capital."

The trend marks a shift from a few years ago, when Korean retail investors poured into U.S. tech giants like Tesla and Nvidia.

Crypto equities' falling stock prices, fueled in part by the U.S. Federal Reserve’s delay in cutting interest rates, haven’t dampened their demands.

Bitmine, the world’s largest holder of Ethereum, saw its share price peak at $135 at the close on July 3 following its June initial public offering, before plunging to $43.62 on Friday — a drop of nearly 68 percent. Circle Internet Group, the issuer of the USDC stablecoin, also fell sharply, tumbling from a high of $263.45 on June 23 to $131.98 on Friday.

Yet appetite remains strong. During a five-day period starting Aug. 25, Korean retail investors net purchased $96.87 million in Bitmine shares and $32.44 million in Circle, according to data from the Korea Securities Depository.

"In Korea, everything is a momentum trade — and momentum can turn quickly. Circle has already corrected by more than 50 percent, while KakaoPay's sharp decline is another sign that parts of this story are losing steam," 10x Research said in its report. "Still, for Korean investors, the old adage holds true: the trend is your friend."