South Korea's cryptocurrency market experienced a contraction in value, trading volume, and profitability during the first half of 2026, according to a survey released on October 1 by the Korea Financial Intelligence Unit (KoFIU) and the Financial Supervisory Service.
The survey, which covered 26 registered virtual asset service providers, highlighted that users in their 40s have now become the largest age demographic among participants.
Valuations and Trading Activity Drop
The total market capitalization of cryptocurrencies listed on domestic exchanges fell by 33% to 58.9 trillion won during the first half of the year, wiping out 28.3 trillion won compared to the second half of 2025.
Trading activity contracted even faster. Average daily trading volume declined by 44% to 3.1 trillion won, while won deposits held on exchanges dropped 35% to 5.2 trillion won. Regulators noted that both won-based and coin-only exchange service providers experienced these decreases in daily volume.
Crypto assets on domestic exchanges recorded a 69% maximum drawdown during the period. While this figure improved slightly from a 73% drawdown in the second half of 2025, it still exceeded the maximum drawdowns of South Korea's traditional stock indices, the KOSPI and KOSDAQ, which fell 55.1% and 31.8% respectively over the same timeframe.
Exchange Profits Fall Amid Demographic Shifts
Despite the broader market contraction, eligible trading accounts edged up slightly by 0.4% to 11.175 million. The number of users holding under 1 million won rose by 4% to reach 8.63 million.
However, lower trading volumes severely impacted exchange revenues. Sales across domestic exchanges fell 41%, and combined operating profits plummeted 78% to 81.6 billion won, down from 374.8 billion won in the previous half-year period.
Demographically, users in their 40s surpassed those in their 30s to form the largest age group in the market.
Regulatory Warning on Smaller Tokens
In addition to broader market metrics, the KoFIU highlighted specific risks related to smaller digital assets. Among 234 tokens traded on only a single domestic exchange, 93 tokens possessed market capitalizations of 100 million won or less. The regulator cautioned that these assets carry significant liquidity risks and extreme price volatility.
