South Korea's Crypto Market Cools as Deposits Plunge 42%, Market Cap Drops 14%

South Korea's cryptocurrency market experiences significant cooling as trading activity and liquidity contract sharply in early 2025. According to a joint survey by the Korea Financial Intelligence Unit and Financial Supervisory Service, the combined market capitalization of digital assets held by Korean crypto exchanges plummeted 14% to 95.1 trillion won ($68.7 billion) from year-end levels.

The dramatic 42% drop in cryptocurrency deposits signals waning investor confidence in the Korean digital asset ecosystem, marking a stark contrast to the country's previously bullish crypto sentiment. This substantial decline reflects broader market volatility affecting Bitcoin, altcoins, and the entire blockchain sector.

Korean cryptocurrency exchanges, once among the world's most active trading platforms, now face reduced liquidity as retail and institutional investors pull back from digital asset investments. The market contraction highlights growing regulatory scrutiny and changing investor behavior in one of Asia's largest cryptocurrency markets.

This cooling trend could impact global cryptocurrency prices and trading volumes, as South Korea remains a crucial market for Bitcoin and major altcoins. The decline underscores the volatile nature of digital assets and evolving regulatory landscapes affecting cryptocurrency adoption worldwide.