New Korean Law Set to Exclude 99% of Buyers, Squeeze Bitcoin Liquidity
South Korea has long been presented as one of the world’s important crypto hubs, but in practice its market has been constrained by policy and access limits. The new law — expected to exclude about 99% of prospective buyers from the domestic Bitcoin market — will effectively shrink the pool of active participants, removing a large share of retail and possibly some institutional flows for BTC.
The immediate effect will likely be lower onshore liquidity, wider bid-ask spreads and increased short-term price volatility on Korean venues, complicating price discovery for BTC. Traders and investors may shift to offshore exchanges, peer-to-peer channels, or informal markets, increasing fragmentation and compliance risks. For market participants and platforms, the change underscores how narrowly targeted regulation can ripple through liquidity, access and local crypto ecosystems.