South Korean Investors Shift to Stablecoin Stocks Amid GENIUS Act and Tech Rotation

South Korean investors are increasingly reallocating their overseas portfolios away from U.S. big tech stocks and toward stablecoin-related equities, a shift closely tied to the passage of the U.S. GENIUS Act signed by President Donald Trump in July. The act is credited with providing much-needed regulatory clarity to the stablecoin industry, which has spurred renewed investor confidence in digital-asset-linked shares [1]. Data from the Korean Center for International Finance (KCIF) highlights the rapid pivot, noting that the share of virtual asset-related stocks among the top 50 net-bought overseas shares surged from 8.5 percent in January to 36.5 percent in June, before slightly easing to 31.4 percent in July [2].

The declining interest in U.S. big tech stocks is also evident in investment patterns. Monthly purchases of the top seven U.S. tech stocks dropped from an average of $1.68 billion between January and April to just $260 million in July, signaling a dramatic shift in investor preferences [3]. This move was part of a broader behavioral change, as South Korean investors became net sellers of foreign stocks in May and June following months of net buying [4]. In July, they returned to net purchasing, though the total of $499 million was far below the first-quarter average of $3.8 billion, indicating a more cautious approach to foreign market exposure [5].

The KCIF attributed the shift to a combination of factors, including stronger domestic market performance and a stronger local currency, which have made foreign equities less appealing [6]. Additionally, ongoing concerns over the potential global economic impact of the U.S. tariff policy have reinforced a more defensive investment stance among South Korean retail and institutional investors [7]. Despite these cautionary signals, stablecoin-related trading remains robust, with investors seeking assets that offer both regulatory stability and digital asset exposure [8].

The GENIUS Act, while praised for its clarity, also includes restrictions on interest-bearing stablecoins, a provision that has generated mixed reactions within the market. However, for South Korean investors, the regulatory framework is seen as a key enabler for firms involved in stablecoin issuance and management, further fueling their interest in related equities [9].

Market analysts suggest the current trend reflects a broader diversification strategy in response to macroeconomic and regulatory uncertainties. While the long-term impact of the GENIUS Act and the associated shift in asset allocation remain uncertain, stablecoin-linked stocks are emerging as a prominent area of interest for global investors [10].

Source:

[1] https://indialife.us/article.php?id=261536

[2] https://www.binance.com/en/square/post/28119645502122

[3] https://coinpedia.org/news/south-korean-investors-dump-u-s-tech-bet-big-on-stablecoin-stocks/

[4] https://www.facebook.com/groups/1022098825726350/posts/141****706727158/

[5] https://coinmarketcap.com/community/articles/689a00b4292cb809b62cb18d/

[10] https://invezz.com/news/tag/ripple/