South Korean Investors Redirect Funds to U.S. Stocks and Cryptocurrencies

Following the recent U.S. presidential election, a significant shift in financial behavior has been observed, with a surge in U.S. stocks and virtual assets triggering a notable money move.

According to the financial sector on Nov. 18, the demand deposit balance of the five major banks in South Korea — KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup — stood at 587 trillion 645.5 billion won as of Nov. 14. This marks a 1.7% decrease compared to the end of the previous month, representing a reduction of over 10 trillion won in just 10 business days.

The trend extends beyond demand deposits, with a noticeable shift in savings accounts and loan activities. The savings balance of these five major banks decreased by 2.0% (approximately 770 billion won) from 38.92 trillion won to 38.13 trillion won during the same period. Concurrently, the balance of negative accounts increased by 1.9% from 38.87 trillion won to 39.62 trillion won, indicating that funds are being withdrawn from bank deposits and negative loans are being taken out for investment purposes.

A significant portion of the funds leaving the banks appears to be moving towards overseas stock markets and the virtual asset market. According to the Korea Securities Depository, as of the 14th, the amount of U.S. stocks held by domestic investors was $100.79 billion, a 9.9% increase (by $9.13 billion) compared to the end of the previous month ($91.06 billion). This shift is further evidenced by the trading volume on Upbit, a major cryptocurrency exchange, which reached 25 trillion won on Nov. 13 alone.

A financial sector official commented, "It is understood that a significant amount of funds has recently been transferred to K Bank, which is linked to Upbit," and added, "In a low-interest-rate environment, there is a growing preference for investment products with high expected returns over stable but low-yield deposits."