South Korean Retail Investors Shift Focus to Stablecoin-Linked Stocks Amid U.S. Regulatory Changes

South Korean retail investors are increasingly diverting their overseas stock investments toward crypto-related shares, particularly those tied to stablecoins, according to a report by the Korean Center for International Finance (KCIF). Monthly investments in U.S. big tech stocks plummeted from an average of $1.68 billion between January and April to just $260 million by July.

The pivot follows the U.S. passage of the GENIUS Act, a landmark stablecoin bill signed into law by President Trump. Domestic investors' allocation to digital asset stocks surged from 8.5% in January to 36.5% in June before slightly retracting to 31.4% in July. "The local stock market's outperformance and a stronger won have prompted investors to repatriate capital," the report noted.

South Korea's Financial Supervisory Service recently cautioned asset managers against overexposure to crypto equities like Coinbase. The trend underscores growing retail conviction in blockchain-adjacent markets despite regulatory headwinds.