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

Generated by AI AgentCoin World
Monday, Aug 11, 2025 11:15 am ET1min read
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Aime RobotAime Summary

- South Korean investors are shifting overseas portfolios from U.S. big tech to stablecoin-linked stocks amid the U.S. GENIUS Act's regulatory clarity.

- Virtual asset-related shares surged to 31.4% of top net-bought foreign stocks in July, while U.S. tech stock purchases fell to $260M from $1.68B averages earlier.

- Domestic market strength, currency appreciation, and U.S. tariff concerns drove the shift, with stablecoin firms benefiting from perceived regulatory stability.

- Analysts view the trend as a defensive diversification strategy amid macroeconomic uncertainties, though GENIUS Act's long-term impact remains unclear.

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/