KOSPI Crash Sends Korean Won-Based Volumes Soaring in Crypto Markets

South Korea's cryptocurrency markets have seen a significant surge in activity as the KOSPI index suffered steep losses this week. According to data from Upbit, trading between the Korean won and Tether (USDT) accelerated rapidly during the index's decline, with volumes nearly hitting 200 billion won on July 29, up from roughly 20 million USDT on July 25, a 600% jump.

The surge in crypto activity is attributed to fund rotation away from Korean equities and toward trading or stock-linked derivatives available through overseas venues. Local analysis linked the spike to capital moving out of stocks into crypto during the sell-off, or traders seeking access to derivatives tied to Korean equities through overseas exchange platforms.

Bitwise's research suggests that Bitcoin has shown relative strength compared with large U.S. stock benchmarks, outperforming major mega-cap stocks and remaining relatively flat since late June's semiconductor peak. The firm attributes this 'remarkable outperformance' to Bitcoin pricing early signals of future monetary-policy easing, despite inflation concerns and near-term interest-rate hike risks.