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South Korea’s benchmark stock index posted its biggest daily decline as geopolitical tensions stemming from escalating conflict between the United States, Israel and Iran rattled markets.
Traders focused on listing new coins on cryptocurrency exchanges, despite falling stocks, and newly listed coins saw gains of tens of percent even as market sentiment deteriorated sharply.
The Korean stock market is under pressure amid geopolitical tensions
Data from Google Finance showed that the Korea Composite Price Index (KOSPI) fell by more than 12%. In addition, KOSDAQ’s securities data services operations in Korea saw losses I got over it 10%
“The KOSPI in Seoul ended up trading 12.06%, the biggest daily percentage drop on record,” said market analyst David Scott. books.
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Channel News Asia reported that the Korea Stock Exchange imposed a temporary trading halt on Wednesday morning after the KOSPI and KOSDAQ indices fell by more than 8%.
Not only South Korea, but also Japan, Hong Kong and China saw stock markets decline on Wednesday, the result of rising global tensions. The continuation of the crisis led to… Sudden rise In oil prices. At the same time, driven closed The Strait of Hormuz has increased concerns.
Asian economies are particularly vulnerable to disruptions in energy supplies coming from the Middle East. Many of these economies rely heavily on crude oil imports from the Gulf countries.
Japan and South Korea are among the countries most vulnerable to this effect. 87% of Japan’s total energy consumption and 81% of South Korea’s come from imported fossil fuels.
Why KOSPI performance is important for cryptocurrencies
The KOSPI index registered a new decline after a 7.2% drop on Tuesday, marking its worst two-day performance in decades. The index is now approaching the 5,000 level, a level that carries symbolic meaning beyond being just a round number.
During this election, President Lee Jae-myung presented his “KOSPI 5,000” vision and pledged to support the stock market.
Lee Jae-myung told me that he doesn’t think reaching the Cosby 5,000 is too difficult. If you believe me, you should show more interest in the stock market ,.
It is worth noting that in the last trading day before the presidential election on June 3, the KOSPI closed at 2,698.97. In the next eight months, the index increased by almost 85%, surpassing the 5,000 mark for the first time in January 2026.
The stock market rally had real effects on cryptocurrencies. As stocks rose, liquidity from individual Korean investors moved away from cryptocurrencies, with many moving their money toward stocks.
BeInCrypto revealed in November that cryptocurrency trading volumes had dropped by more than 80%. The financial stability report issued by the Bank of Korea stated that the trading volume in the Korean digital currency market reached 157% compared to the global average of 112%, with individual investors increasingly turning to short-term profits.
Cryptocurrency listing defies broader market turmoil
This decline in stocks contrasts sharply with developments in South Korea’s digital asset sector. While stocks are falling, new altcoins on South Korean exchanges have seen strong demand.
CoinGecko noted that Definitive Finance’s EDGE token posted strong gains following its listing on Upbit.
Additionally, Centrifuge’s CFG token rose 21.6% after its listing on Bithumb. The performance of these coins suggests that Korean crypto investors may maintain an appetite for digital assets even in times of traditional market decline.
The sustainability of this enthusiasm is unclear. Exchange listings often cause initial excitement and a surge in volume that drives prices up, regardless of the prevailing market mood.
The key question is whether these gains reflect a real shift from stocks to cryptocurrencies, or whether they are just driven by short-term speculation. Also, if the KOSPI decline worsens and Korean retail investor sentiment turns decisively negative, the capital that moved into stocks may not automatically return to cryptocurrencies. Continued risk aversion may hold back flows in both asset classes.
