Recently, the Korean stock market has witnessed a surge in share prices simply driven by the keyword “digital assets.” As the government pushes for the introduction of Korean-won stablecoins and cryptocurrency ETFs, buying enthusiasm for stocks associated—sometimes tenuously—with digital asset themes has intensified to potentially overheated levels.
In the past few weeks, out of dozens of stocks designated as investment warning issues in the KOSPI and KOSDAQ markets, a significant portion were classified as digital asset theme stocks. Kakao Pay, Me2on, Bitmax, Aton, and LG CNS have emerged as key leaders of this trend, with their shares posting steep gains within a short time frame.
Notably, Kakao Pay experienced a sharp rally amid heightened expectations surrounding its stablecoin initiatives and plans to expand its digital financial ecosystem. The Korea Exchange imposed investment warnings and eventually suspended trading after the surge. A decision on lifting the suspension is expected soon.
Such rallies driven by policy announcements and thematic expectations are drawing concern, as they reflect a speculative shift away from tangible business fundamentals toward narratives alone. Securities industry experts have warned, “When share prices rise purely on policy momentum, volatility among theme stocks becomes extreme. Once the rally stalls, profit-taking often leads to far sharper declines.” Indeed, Kakao Pay and Me2on both experienced sudden pullbacks after being classified as investment-risk stocks.
The government has officially declared its intention to cultivate digital assets as a “new growth engine.” The Lee Jae-myung administration has outlined plans for issuing Korean-won stablecoins and expanding cryptocurrency-based financial products, with multiple related bills already submitted to the National Assembly. Financial authorities are also accelerating regulation of exchanges and the broader digital asset management framework.
However, criticism is growing across the industry that share prices are overheating based on little more than policy expectations, without robust business plans or evidence of market maturity. Some smaller companies have been accused of fueling short-term rallies simply by mentioning keywords such as “digital assets,” “CBDC” (central bank digital currency), or “stablecoins,” despite lacking any concrete strategies.
One brokerage analyst observed, “As we saw with AI and secondary battery themes over the past two years, the pattern of ‘policy drive → theme speculation → sharp correction’ has become entrenched. Investors should closely monitor trading volumes and any investment warning designations.”
This wave of speculation also ties to high market liquidity. With abundant capital still searching for compelling investment targets, money is flooding into “policy beneficiary stocks,” with expectations overshadowing corporate performance or sector fundamentals. Experts believe that once the Digital Asset Basic Act and more concrete regulations are enforced, the gap between expectations and reality will become even clearer.
Ultimately, the digital asset theme risks becoming yet another example of “story-driven overheating” in Korea’s capital markets. For investors, heightened caution and a measured approach have rarely been more necessary.
