The stock market soars, while crypto heats up slowly? Koreans' all-in bets have never cooled down

Writing by: Zen, PANews

When it comes to crazy investing, Koreans are serious. The Korean stock market’s historic surge that began in the first half of last year proves this once again.

As of the end of February 2026, the Korea Composite Stock Price Index (KOSPI) has already risen nearly 50% this year, making it one of the world’s top-performing markets.

On February 25, the KOSPI broke through 6,000 points for the first time during trading; the next day, it closed above 6,300 points for the first time, with 10 out of the past 11 trading days recording gains, continuously hitting new highs. On February 28, Samsung Electronics’ market capitalization surpassed $1 trillion, becoming the first Korean company to join the “trillion-dollar club.”

As CryptoQuant founder said: “We Koreans love gambling. Don’t underestimate this country.”

Market reforms, an undeniable catalyst

The takeoff of the Korean stock market is the result of a series of government reforms and global industry dividends resonating together.

On January 22, South Korean President Lee Jae-myung had lunch with members of the Democratic Party’s “KOSPI 5000 Special Committee.” Coincidentally, before the lunch, the KOSPI index first broke through 5,000 points during trading. Achieving the “KOSPI 5000 era” was a long-standing goal Lee Jae-myung repeatedly emphasized as a presidential candidate. Now, that vow has been fulfilled, and even surpassed expectations.

In less than a year, the Korean stock market has risen from 2,300 in April last year to over 6,200 now. Perhaps Lee Jae-myung didn’t expect the market to go so wild, completing in months what would normally take other countries years or decades.

And this surge may not be over yet. Strong upward momentum continues to push the KOSPI to new heights. Recently, JPMorgan and Nomura Securities both raised their target forecasts for Korea’s composite index: JPM predicts KOSPI will reach 7,500 this year, while Nomura expects it to hit 8,000 by the first half of 2026.

Behind Korea’s strong and crazy stock market is undoubtedly the global AI boom. Tech giants’ “arms race” in AI has driven up the prices and strategic importance of key storage chips like DRAM and NAND, as well as high-bandwidth memory (HBM). Against this backdrop, Samsung Electronics and Nvidia’s main high-bandwidth storage supplier SK Hynix have each gained over 60%.

If the fundamental demand for AI business supports the rise of Korea’s stock market, then government-led reforms are the catalyst accelerating the surge.

The real structural change in Korea’s stock market is the government targeting the long-standing “Korea Discount” as a policy focus. Through reforms in corporate governance, shareholder returns, market systems, and trading infrastructure, Korea aims to attract foreign and long-term capital willing to assign higher valuation multiples.

Since taking office last June, Lee Jae-myung’s government has pushed a more aggressive package of capital market reforms:

• Expanding the scope of fiduciary duty for boards to strengthen accountability to shareholders and capital efficiency;
• Proposing adjustments to dividend-related tax policies to incentivize listed companies to increase dividends and improve shareholder returns;
• Increasing enforcement resources and regulatory tools to crack down on insider trading, market manipulation, and other violations, while outlining a roadmap to include Korea in MSCI’s developed markets.

Before Lee Jae-myung’s presidency, Korea had already initiated trading system reforms in March last year. The country launched Nextrade (NXT), its first alternative trading system, extending stock trading hours to 8:00–20:00 (including pre-market and after-hours) with lower fees to attract participants. At the same time, Korea ended its longest-ever short-selling ban, emphasizing systemic reforms and stricter enforcement to improve market transparency and price discovery—an important factor for foreign investors seeking predictable market rules.

Putting these factors together, Korea’s market boom is not just riding the AI wave but also driven by a set of policy reforms guiding the trend. Industry narratives lift profit expectations, while institutional reforms raise valuation ceilings.

Therefore, the rise of KOSPI is not merely an AI-themed rally; behind it is also a major government effort to reform the system and revalue assets.

Slow progress on Korea’s new crypto policies

Compared to the rapid surge in stocks, new crypto policies are more cautious, even somewhat slow.

As an extension of the “elimination of Korea Discount” and market re-pricing plans, Korea’s approach to crypto regulation is evolving. It has shifted from early passive oversight focused on fraud and AML to a systemic framework aimed at protecting users, regulating markets, and institutionalizing the industry.

Starting July 2024, the “Virtual Asset User Protection Act” will require virtual asset service providers to securely custody user deposits and virtual assets, establish stricter custody and management obligations, and create legal grounds for penalties against unfair trading practices like insider trading and market manipulation. This aligns with the transparency and accountability goals of stock market reforms.

Last year, Korea’s Financial Services Commission (FSC) announced plans to introduce a spot crypto ETF and develop a stablecoin regulatory framework. These reforms do not mean Korea is rushing to fully embrace crypto assets; rather, they are layered, cautious, and somewhat slow in implementation.

In February 2025, FSC released a regulatory roadmap, planning to allow about 3,500 listed companies and licensed investors to trade virtual assets starting in the second half of 2024. However, according to Seoul Economic Daily, the draft “Guidelines for Virtual Asset Trading by Listed Companies” only entered consultation and finalization in January this year, with official implementation likely to be more broadly scheduled within this year. The gap between announcement and execution reflects Korea’s gradual regulatory approach.

Regarding crypto ETFs, Korea has historically been conservative. After the U.S. approved a Bitcoin spot ETF in January 2024, Korean authorities stated they would not evaluate following suit in the short term. However, over the past year, Korea has shifted from principled rejection to cautious acceptance. The government’s 2026 economic growth plan mentions establishing a comprehensive regulatory framework for issuance, circulation, and trading of digital assets via the “Basic Law on Digital Assets,” with plans to introduce a spot ETF and a stablecoin regulatory framework.

Discussions on the won-backed stablecoin have been heated in recent months, but authorities remain cautious. The biggest challenge is the issuer of the stablecoin. The banking sector, represented by the Bank of Korea, emphasizes that without bank involvement, KYC/AML compliance may be inadequate and could impact Korea’s capital openness and financial stability.

Bank of Korea Governor Lee Chang-yong advocates for a bank-centered stablecoin model.

While policy directions are loosening and legislative frameworks are being drafted, actual implementation at the regulatory and participant levels remains slow—reflecting Korea’s cautious stance in the crypto market. Overall, Korea’s approach to both capital markets and crypto assets follows a similar phased process: first clarifying responsibility boundaries, disclosure, and enforcement tools, then gradually expanding participation and capital through phased entry and productization.

Koreans’ fervor, resilience, and desire for wealth

Since mid-last year, as Korean investors flooded into the stock market, mainstream media and social platforms have occasionally portrayed a pessimistic view that “Koreans are no longer trading crypto.”

These reports are partly supported by FSC data—by mid-2025, the average daily trading volume of Korea’s top five exchanges was about 6.4 trillion won, down roughly 12% month-over-month; according to data submitted to the National Assembly by the Financial Supervisory Service, total crypto trading volume in Korea last year fell about 11%. This indicates a genuine slowdown in crypto market activity.

However, when compared to global trading volumes, the picture is more complex. The global crypto market has entered a winter, and the contraction is not limited to Korea.

In fact, amid the global crypto winter, Korea’s market resilience remains impressive.

CryptoQuant data shows that after peaking in Q4 2024, Korea’s share of the global crypto market has remained steady between 8% and 11% since 2025. During recent months of negative sentiment and liquidity drought, Korea’s market share surprisingly even slightly increased.

Another sign of resilience is the continuous growth in the number of Korean crypto users. FSS reports show that the number of crypto trading users increased from 8.91 million in 2024 to 9.91 million last year. Despite the decline in total trading volume, the number of participants and market penetration are still rising, indicating a solid market foundation.

Stock and crypto markets have never been zero-sum.

In Korea, whether it’s the KOSPI crossing 6,000 points or the millions of crypto investors, both reflect the same social psyche: in a highly competitive, increasingly stratified society, ordinary people have an intense desire to break barriers and achieve wealth jumps.

The “elimination of Korea Discount” addresses valuation gaps in the capital market, while Koreans’ relentless investment enthusiasm aims to eliminate the “discount” on ordinary people’s destiny. As stock dividends are being realized, nearly ten million Koreans still hopeful about crypto are patiently waiting for another “KOSPI 5000 era” in the crypto world.