Retail traders, especially those in South Korea, have increasingly shifted from altcoins to crypto-related equities, leaving a massive funding gap in the altcoin market, according to new data from 10x Research.
Key Takeaways:
Retail investors, particularly in South Korea, have shifted from altcoins to crypto-related stocks, creating an $800 billion gap in altcoin market value. Institutional demand for Bitcoin and the rise of listed crypto firms have widened the divide between Bitcoin and other digital assets. 10x Research warns this trend signals a structural change, with altcoins likely to struggle in attracting fresh capital.Over the years, Bitcoin and altcoins have tended to rise and fall together, driven by shared cycles of speculation.
But this time, institutional adoption of Bitcoin and the growing popularity of listed crypto firms have created what 10x Research calls a “near trillion-dollar gap” between Bitcoin’s market value and that of other digital assets.
South Korea’s Shift to Crypto Stocks Leaves $800B Altcoin Gap
South Korea has long been a hub for altcoin trading, with local investors often favoring smaller tokens over Bitcoin.
At times, altcoins have made up over 80% of trading activity on Korean exchanges, compared to global averages where Bitcoin and Ether dominate.
“Altcoin market capitalization would be roughly $800 billion higher if retail investors — especially in South Korea — hadn’t redirected their attention toward crypto-related stocks and other equities,” said Markus Thielen, CEO and head of research at 10x Research.
“In this cycle, altcoins have failed to attract sufficient new capital.”
Between Nov. 5 and Nov. 28, 2024, Korean exchanges saw daily average crypto volumes of $9.4 billion, surpassing the $7 billion traded on the Kospi stock index, according to data from CCData and Korea Exchange. Those volumes have since plunged.
10x Research warned that fading retail participation is a key reason altcoins have lagged behind Bitcoin—and the trend may deepen.
A recent market selloff triggered by renewed US-China trade tensions erased $380 billion in crypto market value, of which $131 billion came from altcoins alone.
According to 10x, the shift marks a “structural change” in the market. As institutional money flocks to Bitcoin and speculative traders chase token-holding stocks, the altcoin sector may struggle to recover its lost share of capital anytime soon.
South Korean Retail Investors Pour $1.24B Into US Tech, Crypto Stocks
As reported, South Korean investors turned the Chuseok holiday into a high-risk trading week, pouring $1.24 billion into US tech and crypto-linked assets while local markets were closed between October 3 and 9, data from the Korea Securities Depository shows.
The frenzy was led by leveraged ETFs and high-growth stocks, as traders sought to ride Wall Street’s momentum amid optimism surrounding US tech resilience and domestic stimulus hopes.
Top foreign buys included the Direxion Daily Tesla Bull 2X ETF with $151 million in purchases, followed by Iris Energy ($105 million), Meta Platforms ($100 million), and Tesla ($96 million).
Investors also snapped up $95 million worth of the T-REX 2X Long BMNR Daily Target ETF, which tracks BitMine Immersion Technologies with double exposure, highlighting growing appetite for crypto-related equities.
However, the timing proved unfortunate. The buying spree ended abruptly as U.S.–China trade tensions sparked a global market pullback, erasing much of the previous week’s gains.
Meanwhile, in August, South Korea’s financial regulator moved to rein in risky lending practices in the digital asset sector, ordering local exchanges to suspend all crypto lending services until a proper regulatory framework is established.
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