The Gap Between South Korea and the Global Crypto Market Has Widened Since Four Years Ago

The South Korean crypto industry may be completely absent from perpetual contracts, prediction markets, and stablecoins...

Written by: @100y_eth

Compiled by: AididiaoJP, Foresight News

The glory days of the South Korean crypto market seem to be over. However, for global protocols, South Korea remains a market worth paying attention to.

Indeed, during the recent prolonged bear market, trading volumes on exchanges like Upbit and Bithumb have significantly declined. Yet, once market sentiment shows any signs of recovery, trading volumes can rebound by 2.5 to 3 times in a short period. This indicates one thing: the retail liquidity in the South Korean crypto market returns quickly.

But the industry itself is another matter.

Compared to the past, the South Korean crypto ecosystem has lost much of its appeal. During the bull market of 2021, South Korea had a notable presence in the global crypto sphere: a solid investor base, active communities, and a wave of companies and projects across public chains, DeFi, blockchain games, NFTs, infrastructure, and wallets.

Everything changed after the Terra collapse in 2022.

The On-chain World is Heading Towards Two Extremes

While the South Korean crypto industry slows down, the global blockchain sector has taken an interesting path.

The peak of Bitcoin in 2025 is nearly double that of the peak in 2021. However, the growth of the native on-chain products that exploded in 2021 and 2022 has not kept pace.

The market has clearly expanded. The question is: who is actually reaping the benefits?

The answer is quite simple—one group is driven by speculative demand, while the other connects crypto with the real economy.

When the market was still hovering at low levels not long ago, year-on-year data clearly told the story: DeFi locked value has significantly declined, and both decentralized and centralized exchanges have seen drops in spot trading volumes, liquidity staking token locks, NFT transaction volumes, and crypto financing counts.

In other words, the native on-chain products that defined the market during the last bull run have experienced declines even worse than Bitcoin, which serves as the benchmark for market performance.

On the other hand, even in such a difficult market, there are still a few sectors experiencing growth.

Perpetual contracts (Perps) and prediction markets thrive on speculative demand; stablecoins and RWA connect crypto to the real economy.

Thus, the blockchain industry is indeed growing. However, the nature of this growth is more critical—it has taken the shape of a dumbbell: one end is speculation, and the other is integration with the real economy.

The South Korean Blockchain Industry is Falling Behind

Perpetual contracts, prediction markets, stablecoins, and RWA are the four fastest-growing directions in the global blockchain industry.

But what about South Korea? How many of these four sectors have the potential to grow locally?

Zero.

Currently, the South Korean blockchain industry lacks a legitimate path to operate in these four directions.

Perpetual contracts: South Korea does not have explicit laws prohibiting perpetual contracts. However, the Financial Supervisory Commission holds a very conservative attitude towards credit provision related to crypto assets. Under the existing legal framework, there is no legal basis for officially launching crypto derivatives business domestically.

Prediction markets: In South Korea, prediction markets are typically considered illegal gambling. Recently, the Korea Communications Commission blocked domestic access to Polymarket.

Stablecoins: The long-delayed Digital Asset Basic Law, which is expected to regulate stablecoins, has yet to be enacted. Currently, there is still no legal basis for companies to issue and circulate stablecoins.

RWA: Although South Korea has an STO framework, it is highly tied to "fragmented investment products," which are not the same as what is typically referred to as RWA in the global market. South Korea currently lacks a regulatory framework for RWA. Recently, regulators indicated that tokens issued overseas based on South Korean securities and sold only to overseas investors are unlikely to be deemed violations of the Electronic Securities Act. However, the restrictions for South Korean institutional investors to truly enter RWA products remain clear.

Perpetual contracts are a trading innovation that has emerged from the crypto market itself. The Singapore Exchange has already launched Bitcoin and Ethereum perpetual futures, and the U.S. Commodity Futures Trading Commission has approved KalshiEX's Bitcoin perpetual futures.

Prediction markets represent another type of innovation—they can turn almost anything in the world into a tradable interface. Recently, they have also begun to show potential as hedging venues and even next-generation insurance products.

Stablecoins and RWA are different. They have detached from crypto market sentiment, achieving product-market fit independently, and are becoming the foundational infrastructure for the next generation of finance.

These innovations have hardly occurred in South Korea.

Thus, a strange paradox arises: the gap between South Korea and the global market today is actually wider than it was in 2021.

This does not mean that no one is taking action. The regulatory framework remains unclear, but financial institutions are already preparing for stablecoin businesses; in terms of RWA, some participants are choosing to issue products overseas first.

South Korea still has a clear advantage: once the regulatory environment is in place, the speed at which this market can develop its industry may surpass that of most countries.

We hope South Korea can soon provide a clear regulatory framework for perpetual contracts, prediction markets, stablecoins, RWA, and related sectors. Only then will the South Korean blockchain industry truly reopen its growth space.

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