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There is a very real development happening right now—Korean retail investors are collectively leaving the crypto space, and the liquidity issues in the global crypto market caused by this wave of withdrawal may just be beginning to surface.
Having been involved in this circle for many years, I have witnessed firsthand how Korean retail investors transformed from the most enthusiastic participants to current stock market investors. This shift is far more than just a change in regional investor preferences; it signals a major structural shift in the global crypto market. Today, let’s analyze from a practical perspective what impact the departure of Korean retail investors is having on the crypto market.
First, it’s important to clarify a fact: Korean retail investors are actually a significant support for global crypto market liquidity. Looking back, they created the unique "Kimchi Premium" phenomenon, which once made Korean exchanges a key hub for global crypto trading. From Dogecoin to PEPE, from LUNA to XRP, those astonishing surges in altcoins all involved Korean retail investors. Now, this "pillar" has loosened.
Numbers speak volumes—Upbit’s average daily trading volume has plummeted by 80%, and Bithumb’s trading volume has decreased by 69%. This level of liquidity evaporation has directly dragged the entire altcoin market into a downturn.
Some might wonder: with Korean retail investors gone, will funds from other regions fill this gap? Honestly, that’s unlikely. The Korean retail trading style is characterized by "high frequency, high leverage, and high heat," and they take away not just money but also the "emotional temperature" of the market. If you don’t believe it, just look at the current volatility of altcoins—compared to the past, when prices would surge or crash wildly at any moment, the market is now noticeably calmer. This calmness indicates a lack of explosive participation enthusiasm.
The departure of Korean retail investors is not an isolated event; it reflects a broader adjustment in investor confidence. Once liquidity dries up, the market will either enter a long recovery phase or wait for a new wave of funds. But at present, such a turning point is still unclear.