South Korean Crypto Liquidity Plummets 55%: Stablecoin Outflows Accelerate, Funds Shift to Stock Market According to data from Allium Labs, since July 2025, the stablecoin balances on South Korea's five major cryptocurrency exchanges have plummeted from $575 million to approximately $188 million by mid-March, a drop of 55%. This downward trend accelerated significantly after the Korean won fell below the 1500-dollar mark on March 13th, a level not seen since the 2008 financial crisis. Bradley Park, founder of DNTV Research, analyzed that the weakening won is prompting investors to accelerate their withdrawal from dollar-denominated assets. The rapid decline in stablecoin balances on exchanges is primarily due to traders selling stablecoins, converting them back to won, and allocating funds to domestic assets. This trend aligns with the South Korean government's policy direction of guiding capital repatriation. The government encourages investors to sell overseas assets (including stablecoins) and reallocate them to the domestic stock market through policies such as "repatriation" accounts and capital gains tax exemptions of up to 100%. This policy benefit from the government is directly reflected in the stock market performance. In 2025, the Korea Composite Stock Price Index (KOSPI) rose by 75% cumulatively, and has gained another 37% this year, making it one of the best-performing major stock indices globally. However, the recent decline in stablecoin liquidity in the South Korean crypto market is interpreted by analysts as a rotation of domestic capital between different assets, rather than a systemic and comprehensive withdrawal. In summary, South Korean investors are shifting their holdings from the crypto market to the domestic stock market. Whether funds will flow back into the crypto market in the future depends on how long this upward trend in the South Korean stock market can be sustained. #SouthKoreanCryptoMarket #CapitalRotation