South Korea raises rates as leverage losses hit 1.45 billion
The Bank of Korea raised its policy rate to 2.75% — the first hike since 2023 — while Korean retail investors lost 1.45 billion dollars on leveraged positions in one month. 62% of liquidated accounts belong to traders in their 20s and 30s.
Double dose of bad news from Seoul. The Bank of Korea raised its policy rate by 25 basis points to 2.75% on July 16 — the first hike since January 2023. At the same time, it became clear how hard leveraged trading has hit Korean retail investors: an estimated 2.15 trillion won, about 1.45 billion dollars (roughly €1.27 billion), evaporated in a single month.
Young investors take the blows
According to market reports, more than 1.2 million retail leverage accounts hit margin-call thresholds; between 320,000 and 460,000 accounts were fully liquidated by brokers. Strikingly, traders in their 20s and 30s account for 62% of fully liquidated accounts. Many young investors built leveraged positions during Korea's strong equity rally and were caught out when prices reversed.
From crypto to stocks — and now?
The losses hit an investor base that had already shifted massively from crypto into equities: crypto holdings on Korean exchanges fell from 83.3 billion dollars (roughly €72.8 billion) in early 2025 to 41.4 billion dollars (roughly €36.2 billion) by February 2026, while won-based crypto volume shrank 71%.
Why this matters for crypto
Higher rates make leveraged trading more expensive and investors more cautious with risk assets. South Korea also remains one of the world's most active crypto markets, especially for altcoins like XRP, for which Korean trading is a key liquidity source. A more cautious Korean retail investor can therefore ripple through global altcoin volumes.
Sources: crypto.news, Wu Blockchain, Reuters, Seoul Economic Daily. Last checked: July 16, 2026.