South Korea’s retail investors, once among Tesla’s most loyal backers, are sharply reducing their exposure to the EV maker and shifting toward crypto-linked equities.
Summary
- Korean retail sold $657M Tesla shares in August, $1.8B over 4 months.
- Crypto-linked stocks now make up 31.4% of top foreign buys.
- Over 10.8M Koreans trade crypto, with volumes beating equities.
Bloomberg reported on Sept. 1 that South Korea’s retail investors pulled back sharply from Tesla in August, selling $657 million of shares while increasing exposure to crypto-linked equities. The move marks the largest monthly Tesla outflow since early 2019 and contributes to a $1.8 billion sell-off over four months.
Despite the selloff, Tesla remains the top foreign stock among Korean retail traders, who still hold about $21.9 billion in the company. But rival favorites like Nvidia and Palantir are far behind, and the gap is narrowing. The leveraged Tesla ETF, which offers double exposure to Tesla shares, also saw record redemptions of $554 million last month.
Capital rotation into crypto stocks
Meanwhile, capital is flowing into crypto proxies. Bitmine Immersion Technologies, often viewed as an Ethereum (ETH) proxy thanks to its large ETH reserves, drew $253 million in net inflows in August alone. Combined with July’s $259 million, Bitmine has become one of the most purchased foreign stocks among Korean investors this year.
The trend extends beyond a single name. Circle and Coinbase attracted millions in Korean inflows in August, pushing total 2025 crypto-stock purchases above $12 billion. According to the Korean Center for International Finance, crypto-related equities now make up 31.4% of the top 50 net-bought foreign stocks by local retail investors, up from just 8.5% at the start of 2025.
Crypto trading surpasses stocks in South Korea
Activity in domestic markets is reflected in the equity rotation. Cryptocurrency volumes surpassed local equities in late 2024, and over 10.8 million Koreans trade digital assets. Retail participation is led by investors in their 20s, who hold a higher share of crypto relative to older demographics.
Policy remains a factor. Authorities are moving toward spot crypto exchange-traded funds and new rules for exchanges, but debates continue whether digital assets should be permitted in pensions and other long-term savings.
For now, Korean retail investors are reducing exposure to Tesla and increasing allocations to blockchain-linked firms. The data shows a structural reweighting from U.S. tech equities into crypto proxies, positioning South Korea as one of the most active retail markets for digital asset exposure.
Source link
