South Korea's Crypto Market Contracts by One-Third

According to a half-yearly survey released on October 1 by the Korea Financial Intelligence Unit (KoFIU) and the Financial Supervisory Service, South Korea's digital asset market has grown older, quieter, and smaller.

In the first half of 2026, users aged 40-49 became the largest demographic, daily trading volume fell 44%, and the total value of cryptocurrencies on domestic exchanges dropped by roughly a third.

Over the same period, digital assets on those exchanges recorded a maximum drawdown of 69%, higher than KOSPI's 55.1% and KOSDAQ's 31.8%. The survey covered 26 registered virtual asset service providers.

South Korea's Crypto Market Shrank by a Third

According to the KoFIU report, the market capitalization of cryptocurrencies traded on domestic exchanges decreased by 33% to 58.9 trillion won. This represents a reduction of 28.3 trillion won compared to the second half of 2025.

The decline in trading activity exceeded that of valuations, as average daily volume slid 44% to 3.1 trillion won. Over the same period, won-denominated deposits on exchanges decreased 35% to 5.2 trillion won.

“Both KRW-based exchange service providers and coin-only exchange service providers saw drops in average daily trading volume,” the results showed.

The maximum drawdown calculation by KoFIU is the difference between the peak and trough price, divided by the peak. This figure improved from 73% in the latter half of 2025. While indicating somewhat reduced volatility, the drawdown remained above both benchmark stock indices.

The new figures continue a downward trend seen at the end of 2025. In that period, market capitalization fell 8%, operating profits dropped 38%, but deposits increased 31%.

Exchange User Numbers Held Steady as Profits Plunged 78%

The number of accounts eligible for trading inched up 0.4% to 11.175 million. However, earnings at exchanges declined significantly due to lower trading volume.

Revenue at domestic exchanges decreased 41%. Concurrently, aggregate operating profit slumped 78% to 81.6 billion won, compared to 374.8 billion won in the prior six-month period.

Additionally, users aged 40-49 surpassed the 30-39 demographic as the largest cohort. Meanwhile, the number of users holding less than 1 million won increased 4% to 8.63 million.

The financial watchdog also highlighted dangers in smaller tokens. Among 234 digital assets traded on a single exchange, 93 had market capitalizations of 100 million won or below. KoFIU cautioned that these tokens pose liquidity risks and severe price swings.