South Korea’s Stock Market Soars: Will the Gains Trickle Down to Crypto?

South Korea’s stock index KOSPI has surged to its all-time high in four years and two months, signaling a bullish run in the local stock market.

An intense wave of foreign buying drove the rally, while shares of crypto-related companies also climbed. South Korean President Lee Jae-myung will outline key financial policies at his 100-day press conference on September 11.

Market Reform Hopes Push KOSPI to Record High

The KOSPI opened at 3336.60, another ATH, on Thursday, after closing at 3,314.53 the day before, up 1.67% from the previous day. Wednesday reached an intraday peak of 3,317.77. This surpassed the previous all-time high of 3,316.08 set on June 25, 2021. Year-to-date, the index has gained 38.1%, marking the sharpest increase among 42 major stock indices across 32 countries.

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Foreign investors net purchased about $1.0 billion—the largest inflow since June 2023—while Korean institutions added $654 million. In contrast, Korean retail investors sold off around $1.63 billion to lock in profits.

Analysts attribute the rally to optimism surrounding President Lee Jae-myung’s capital market reform agenda. Also contributing to the surge was US interest rate cuts which weakened the dollar. In addition, the government decided to keep the “major shareholder” threshold for capital gains tax at $3.6 million (₩5 billion). This decision boosted investor sentiment instead of lowering the threshold to $720,000 (₩1 billion).

The final policy stance will be announced on Thursday at a press conference marking the president’s first 100 days in office. Following this announcement, the KOSPI could see further upward momentum.

Crypto-Linked Stocks Extend Gains

Attention is now on whether South Korea’s stock market rally will continue to lift the share prices of crypto-related companies.

Woori Technology Investment Co., Ltd., a venture capital firm listed on South Korea’s tech-focused junior exchange KOSDAQ, climbed 5.67% to $73 (₩100,810), marking a 50.35% gain year-to-date. Foreign investors currently own 6.39% of its outstanding 84 million shares.

The company also holds a stake in Dunamu, the parent company of Upbit which is South Korea’s largest cryptocurrency exchange.

The rally is being fueled by expectations of regulatory reforms supporting stablecoin adoption in Korea and a wave of corporate trademark filings linked to digital asset businesses.

Neowiz Holdings, a South Korean game developer that owns 123 Bitcoin, has seen its share price rise 38% year-to-date to $18.

In contrast, Wemade, Korea’s largest corporate Bitcoin holder with 223 BTC, has dropped 19.3% year-to-date to $20, despite its former CEO being acquitted in July on charges related to manipulating WEMIX token supply.

Currently, about 15 listed Korean firms collectively hold at least 450 Bitcoin alongside other cryptocurrencies, underscoring the sector’s growing presence in corporate balance sheets.

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