Korean Retail Investors Spur Crypto's Rise as Core Asset, Abandoning Tesla

Korean retail investors shifted $657 million from Tesla Inc. to cryptocurrency-related companies in August 2025, marking the largest monthly outflow since 2019 and signaling a broader shift in investment preferencesKorean retail investors shift $657 million from Tesla to cryptocurrency firms^[1]. Known as “Seohak ants,” these investors sold Tesla shares and leveraged products like the 2x Tesla ETF (TSLL), which saw a $554 million outflow, the largest since early 2024$657M out of Tesla, $12B into crypto: What Korea’s big bet means for global markets^[2]. The capital was redirected to U.S.-listed crypto firms, including Coinbase Global Inc., Circle Internet Financial Ltd., and Bitmine Immersion Technologies Inc., which collectively absorbed over $1.2 billion in inflows during the same periodKoreans Abandon Tesla for Crypto Bets: $657M Exodus Reshapes Markets^[3]. This trend reflects a strategic pivot toward digital assets, driven by Tesla’s waning appeal and the growing allure of crypto infrastructure firms.

The shift follows Tesla’s declining performance, including a 13%-13.5% drop in global deliveries year-over-year in Q2 2025 and a 14% single-day stock plunge linked to political tensions between Elon Musk and former U.S. President Donald TrumpTesla Sees Korean Retail Exodus as Investors Turn to Crypto^[4]. Analysts attribute the sell-off to concerns over Musk’s management volatility, delayed product launches, and intensifying competition from Chinese automakers like BYD and XPeng, which reported record salesSouth Korean Investors Sell $657M in Tesla Stock As They Move to Crypto^[5]. Meanwhile, crypto firms gained traction as investors sought exposure to emerging opportunities, such as upcoming coin listings on exchanges like Coinbase, which historically drive price surges and trading volume spikesKorean retail investors shift $657 million from Tesla to cryptocurrency firms^[1].

Korean investors allocated $426 million to Bitmine Immersion Technologies, a firm with a substantial Ethereum treasury, and $282 million to a 2x Ether ETF, underscoring their appetite for leveraged exposure to digital assetsBillions Flow Into Coinbase, Circle, Bitmine as Korean Investors Buy the Dip^[6]. The trend extends beyond individual stocks, with institutions like Marti Technologies reallocating 20% of their cash holdings to Bitcoin and Vaultz Capital increasing its Bitcoin holdings by 50 BTCImplications of the Changing Investment Structure^[7]. These moves highlight a structural shift toward crypto as a core asset class, supported by regulatory developments in South Korea, including the Virtual Asset User Protection Act (2024) and the upcoming Digital Asset Basic ActU.S. vs South Korea: How Bitcoin Traders Are Taking Different Paths in 2025^[8].

The capital reallocation has amplified South Korea’s influence in global crypto markets. With 20% of its population now owning digital assets—rising to 25%-27% among 20-50-year-olds—the country’s retail investors are reshaping liquidity dynamics for U.S. exchanges and mining firmsHow South Korea’s Bet on Crypto Is Reshaping Global Market Trends^[9]. For instance, Bitmine’s stock surged 15.47% following Peter Thiel’s 9.1% stake in the firm, which holds $500 million in EthereumPeter Thiel Bets Big on Ethereum With $500M-Backed BitMine Stake^[10]. Such institutional backing reinforces investor confidence in Ethereum’s utility for staking and decentralized finance (DeFi) ecosystems.

The trend’s global implications are significant. South Korean capital flows are accelerating the adoption of crypto infrastructure firms as alternative investment destinations, with analysts predicting continued growth in institutional allocation to digital assetsImplications of the Changing Investment Structure^[11]. As traditional industries face uncertainty, the shift underscores crypto’s emergence as a mainstream asset class, with Korean retail investors leading the charge. This dynamic could further drive innovation in tokenized finance and reshape capital allocation patterns in global markets.