Crypto Trading in South Korea Freezes as Volumes Collapse Despite Record Bitcoin Prices

South Korea’s once-frenzied cryptocurrency market has entered what local industry insiders are calling an “ice age,” as trading activity on the country’s major exchanges has plunged to a fraction of last year’s levels despite Bitcoin hovering near record highs.^[1]

Seven-Fold Collapse in Trading Volumes

According to data from CoinMarketCap cited by domestic exchanges, the average daily trading volume across South Korea’s five leading cryptocurrency platforms — Upbit, Bithumb, Coinone, Korbit and Gopax — fell to about $1.8 billion in December 2025.^[1] That figure is just 15% of the roughly $12.1 billion recorded in December 2024, representing a more than seven-fold drop in a year.^[1]

The slowdown has persisted into the new year. As of early January, average daily turnover was hovering near $1.9 billion, just a quarter of the roughly $8.1 billion traded daily in January 2025.^[1] Market participants say that, unlike previous cycles, volumes have not recovered even as benchmark prices rebounded.

From Hot Market to “Ice Age”

Through much of the recent bull run, Korean crypto exchanges routinely posted daily volumes between $3 billion and $5 billion even during consolidation phases.^[1] That pattern began to break down from November 2025, when average daily volume slipped to about $3.3 billion before sliding further to $1.8 billion in December.^[1]

Industry officials now describe the domestic market as entering an “ice age,” marked not only by shrinking turnover but by a sharp loss of speculative appetite among retail investors who previously drove some of the most intense trading globally.^[1]

Price–Volume Correlation Breaks Down

What troubles exchanges most is the apparent decoupling of Bitcoin’s price from trading activity. Historically, rising Bitcoin prices in Korea have drawn in new funds and triggered rapid increases in both spot and derivative turnover. That long-standing correlation has been badly disrupted since the second half of 2025.^[1]

When Bitcoin surpassed $100,000 in January 2025, average daily volume at Korean exchanges jumped to around $13.1 billion.^[1] Later, as Bitcoin rallied to about $120,000 in July, daily trading still reached roughly $8.6 billion.^[1] In previous cycles, such price levels coincided with intense speculative trading across thousands of altcoins.

Yet when Bitcoin reclaimed the $120,000 level in early October 2025, average daily volume on major Korean platforms lingered between just $3 billion and $4 billion — roughly a third to half of what similar price points generated earlier in the year.^[1] “During Bitcoin’s upward cycles, trading volumes should at least double or triple compared to usual levels,” a senior executive at one major exchange said, noting that “since the second half of last year, prices have risen while trading volumes have decreased — a bizarre phenomenon.”^[1]

The executive described the environment as a “trading cliff” where “no one is buying or selling,” even as headline prices remain strong.^[1]

Retail Retreats as Speculation Cools

Market analysts attribute the slump primarily to the retreat of Korean retail investors who had once treated digital assets as a high-risk, high-reward alternative to property and local stocks. The combination of prolonged volatility, tighter domestic rules and a lack of blockbuster new token listings has cooled enthusiasm, leaving markets dominated by a smaller cohort of longer-term holders.

Broader global dynamics also help explain the contrast between strong prices and thin trading. Research from international firms such as Grayscale argues that crypto has entered a more mature, institutionally driven phase, with Bitcoin and Ether increasingly viewed as “scarce digital commodities” and alternative stores of value rather than purely speculative chips.^[4] That shift can support higher prices even when day‑trading activity fades.

Global Context: Maturing Bull Market, Shifting Flows

Grayscale’s 2026 digital asset outlook characterizes the current environment as part of a “sustained bull market” rather than the early stages of a deep bear phase, noting that past cycles often peaked 1 to 1.5 years after a Bitcoin halving event.^[4] The latest halving occurred in April 2024, and the firm expects crypto valuations to continue rising in 2026, potentially pushing Bitcoin beyond its prior all‑time highs.^[4]

Other global indicators point to a market that has cooled from its late-2025 peaks but remains far from the brutal downturns of earlier eras. In early 2026, Bitcoin has largely consolidated in a relatively tight range, with its drawdown from the cycle top estimated at about 27% — far milder than historic crypto bear markets that saw losses of 75% to over 90% from peak to trough.^[5]

At the same time, there has been an observable shift in trading patterns. In early 2026, some data show that altcoins account for roughly half of total global crypto volume, outpacing Bitcoin and Ethereum’s combined share, as traders increasingly rotate into smaller tokens for relative outperformance.^[5] That rotation has been less pronounced in Korea, where lower overall appetite has dampened speculative flows across the board.

Regulatory Overhang and Structural Headwinds

Regulatory uncertainty remains another drag on activity. Globally, lawmakers are still debating how to classify and supervise digital assets, with several major economies working on crypto market structure legislation aimed at bringing centralized exchanges and stablecoin issuers under clearer oversight.^[6] In Korea, authorities have tightened enforcement around anti‑money‑laundering rules and token listings in recent years, leading to hundreds of coins being delisted and reducing the range of speculative instruments available to retail traders.

While stronger oversight is broadly welcomed by institutional investors and policy advocates, it also constraints the hyper‑speculative segments of the market that historically produced the highest intraday turnover. Exchanges, in turn, face pressure on fee income and are increasingly seeking to diversify into staking, custody and institutional services.

Exchanges Brace for Prolonged Freeze

Korean platforms are now bracing for the possibility that the current low‑volume environment will persist, even if headline prices remain elevated. With revenues closely tied to trading activity, some smaller exchanges may struggle to stay profitable if the “ice age” continues.

Major operators are responding by refining their product mix, focusing on fewer but more liquid pairs, strengthening compliance frameworks and exploring partnerships with foreign institutions. Some are also betting that eventual regulatory clarity and the continued global institutionalization of crypto trading will draw a new wave of capital into the market over the medium term.

For now, however, the stark contrast between record or near‑record Bitcoin prices and the quiet order books of South Korea’s exchanges underscores a new phase for the country’s crypto ecosystem: one in which exuberant day‑trading has given way to cautious holding, and where the traditional link between surging prices and surging turnover has, at least temporarily, broken down.