Korean Retail Traders Pull Money From Bitcoin as It Drops Below $73,000 and KOSPI Rally Roars

A South Korean crypto investor identified only as A has lately been spending more time on brokerage apps than on cryptocurrency exchanges. As the KOSPI and the so-called “Samjeonnix” trade — a nickname for Samsung Electronics Co. and SK Hynix Inc. — climb to fresh highs almost daily, Bitcoin has kept falling. “I keep debating whether to cut my losses on the coins I hold and move into the KOSPI even now,” the investor said. “Holding Bitcoin makes me feel like a fool.”

A "black hole" effect is accelerating in South Korea as retail money leaves the crypto market for stocks. Bitcoin sank below $73,000 for the first time in six weeks as military tensions between the U.S. and Iran flared again, while the KOSPI extended a historic rally and moved above 8,400. Global institutional money is also flowing out of crypto day after day, worsening the market’s trading drought.

On May 28, Bitcoin in Binance’s USDT market fell below $73,000 for the first time since April 13. It was recently trading around $72,900. Renewed geopolitical risk in the Middle East was the main catalyst behind the latest wave of fear.

U.S. Central Command carried out direct airstrikes on Iranian military targets on May 27. U.S. forces shot down four Iranian suicide drones launched at commercial vessels and then struck a drone-launch unit in Bandar Abbas near the Strait of Hormuz. A U.S. official described the attack as defensive and said Washington still intended to preserve the ceasefire. Iran retaliated immediately, raising the risk of a broader escalation.

Xinhua reported that Iran’s Islamic Revolutionary Guard Corps issued a statement shortly after the U.S. strike, saying it had attacked the U.S. air base used in the operation in retaliation for the airstrike on the outskirts of Bandar Abbas. The IRGC said it would respond even more forcefully if the U.S. launched additional attacks and warned that Washington would bear responsibility for the consequences.

The rise in tensions between the U.S. and Iran quickly spilled into oil markets and weighed on risk assets including Bitcoin. Crude, which had fallen more than 5% a day earlier, reversed course as news of the escalating conflict emerged. Brent crude topped $98 a barrel during the session, while West Texas Intermediate traded near $90. Nick Ruck, a director at LVRG Research, said broader geopolitical risks, the possibility of oil-supply disruptions and demand for safe-haven assets had triggered selling. Bitcoin is still trading like a high-beta risk asset, he added.

Institutional outflows also picked up. U.S. spot Bitcoin exchange-traded funds recorded net outflows of $733.4 million on May 28, extending their streak of withdrawals to eight straight trading days. Spot ETFs have lost a combined $2.61373 billion over that span. BlackRock’s spot Bitcoin ETF, IBIT, posted $527.8 million in outflows, the largest daily net withdrawal since its launch.

South Korea’s crypto market is also facing a separate drain as domestic equities enter an unprecedented boom. The KOSPI recently climbed above 8,000 and then surged past 8,400, while Samsung Electronics and SK Hynix kept setting fresh highs. That has pulled investor money sharply toward stocks. The KOSPI has jumped about 215% over the past year, rising from 2,670.15 to 8,400 and more than tripling on an index basis. Over the same period, Bitcoin fell about 32.4%, sliding from $107,781 to $72,900.

According to the Korea Exchange, the KOSPI’s average daily trading value reached 49.3377 trillion won from May 1 through May 21. That compares with about 13 trillion won in July 2025. In less than a year, turnover has nearly quadrupled to a record level.

By contrast, South Korea’s won-denominated crypto market is suffering a severe trading slump. Messari data show the combined 30-day trading volume at the country’s five major won-based exchanges — Upbit, Bithumb, Coinone, Korbit and Gopax — totaled about $46.5966 billion. That works out to average daily turnover of roughly $1.55322 billion. The KOSPI’s average daily trading value this month, at 49.3377 trillion won, was about 21 times larger than the combined daily average for those five exchanges.

Trading has fallen sharply at individual exchanges as well. Data from The Block show Upbit’s monthly trading volume dropped to $26.1 billion as of May 27 from $34.02 billion in July 2025. Bithumb’s volume fell to $13.86 billion this month from $45.97 billion in July 2025. Average daily turnover at South Korea’s major exchanges now stands at only around 1 trillion won each. While KOSPI trading has quadrupled, crypto-market turnover has been cut by more than half.

Even as panic grips the broader market, some analysts argue that Bitcoin has become deeply undervalued. Bitwise’s Bitcoin-to-gold ratio data show the token is trading at an abnormally low level relative to global liquidity. Gaah, a contributor to on-chain analytics platform CryptoQuant, said Bitcoin has fallen into an “extreme negative two standard deviation” range, far below its normal trajectory. Despite the continued erosion in the value of fiat currencies around the world, Bitcoin is trading at a huge discount from a macroeconomic perspective, he said.