A new report from the Korean Centre for International Finance (KCIF) shows that South Korean retail investors who once favoured U.S. big tech shares are increasingly moving their money into crypto-related stocks, especially those tied to stablecoins.
The shift has come with a sharp drop in their monthly purchases of U.S. technology giants, falling from an average of $1.68 billion between January and April to just $440 million in May. Buying activity picked up slightly to $670 million in June before slipping to $260 million in July.
Rise of crypto-linked holdings
KCIF data shows a steep jump in the share of virtual asset-related stocks within the top 50 net-bought overseas equities. In January, these made up only 8.5% of the group.
By June, the figure had climbed to 36.5% before easing to 31.4% in July. Much of this activity has focused on stocks connected to stablecoins, reflecting a growing interest among Korean investors in the sector.
Influence of U.S. legislation
The report links part of the increase to the passage of the U.S. GENIUS Act, signed into law by President Donald Trump last month. The legislation gives a regulatory framework for stablecoins and allows private companies to issue them.
This step has been seen as a potential step for growth in the sector, encouraging foreign investors to gain exposure through equity plays tied to the space.
Decline in big tech purchases
While crypto-linked stocks gained traction, interest in U.S. big tech weakened. Net purchases of the top seven large-cap tech stocks dropped sharply starting in May.
The $1.68 billion monthly average from earlier in the year has not been matched since, with each subsequent month showing significantly lower figures.
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KCIF notes that in May, Korean retail investors as a group became net sellers of overseas stocks for the first time in several months. This selling trend continued in June before reversing in July when net buying resumed with purchases of $499 million. Even so, July’s total was far below the $3.8 billion monthly average from January through April.
Factors behind the retreat
According to the report, domestic market performance has played a role. Since June, South Korea’s stock market has outpaced overseas benchmarks, encouraging investors to keep more funds at home.
At the same time, the Korean won has strengthened, reducing incentives to hold foreign assets. KCIF also points to concerns about the effect of U.S. tariff policies on global growth, which may be prompting caution among retail investors.
Outlook for overseas investment
The KCIF suggests that, for now, individual investors are unlikely to return to heavy overseas stock buying. Persistent uncertainty over trade measures and their impact on the real economy is expected to keep appetite muted.
At the same time, crypto-related equities, particularly those in the stablecoin segment, could continue to attract capital if regulatory developments remain favourable.