For years, South Korean retail investors were some of Tesla’s (TSLA) most loyal backers. Their buying power often magnified global rallies in the stock, making Seoul an unexpected but important Tesla stronghold. This loyalty is now cracking. In August 2025, Korean investors yanked $657 million out of Tesla shares, the largest monthly withdrawal in more than two years.
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The selling did not stop at ordinary stock. Leveraged products tied to Tesla, like the 2x leveraged ETF known as TSLL, saw another $554 million flow out in the same month. For investors who once fueled Tesla’s surges, the scale of the exit marks more than just profit-taking. It signals fading faith in Elon Musk’s electric vehicle empire, even though Koreans still hold nearly $22 billion in Tesla stock.
Tesla Faces Eroding Confidence
The reasons behind the pullback are piling up. Musk’s missed promises, from the long-delayed Cybertruck to the undelivered robotaxis, have tested investor patience. Frequent political spats and management shakeups have only added uncertainty about Tesla’s long-term focus. Meanwhile, the company’s sales figures tell a sobering story. Deliveries in the second quarter of 2025 fell more than 13% year-on-year, while European sales in July collapsed 40%.
At the same time, Tesla’s competition has never been fiercer. Chinese giants like BYD (BYDDY) (BYDDF), XPeng (XPEV), and Nio (NIO) are flooding the market with cheaper, feature-packed EVs. BYD alone sold over a million cars in the second quarter, nearly triple Tesla’s output. For Korean investors who track performance data, the numbers speak for themselves. The once-unshakable growth story around Tesla is showing cracks, and that has pushed them to seek better opportunities elsewhere.
Korean Investors Turn to Crypto
Where is that money going? Straight into crypto. By mid-2025, South Korean investors had funneled more than $12 billion into U.S.-listed cryptocurrency firms, cementing their shift from traditional stocks to digital assets. August alone saw $426 million poured into Bitmine Immersion Technologies (BMNR), a company deeply tied to Ethereum’s growth. Circle (CRCL), the issuer of USDC, pulled in $226 million, and Coinbase (COIN) attracted $183 million. Even high-risk products such as leveraged Ether ETFs drew hundreds of millions.
This is not just a passing trend. Korean retail traders, often called “fearless retail,” have become famous for riskier, high-volume bets. Their appetite for risk has now collided with the explosive rise of crypto companies. Instead of seeing crypto as speculative play money, they are treating it as a serious alternative to Tesla and other traditional equities.
South Korea Builds a Pro-Crypto Culture
The tilt toward crypto is backed by demographics. Roughly one in five South Koreans already owns digital assets, and that share rises to over a quarter among those aged 20 to 50. This generation has grown up with mobile-first finance and sees crypto not as exotic but as natural. For them, moving from Tesla shares to crypto stocks feels less like a leap and more like a logical next step.
Regulation has also paved the way. Laws like the Virtual Asset User Protection Act, passed in 2024, have helped legitimize crypto trading in the country. More rules are on the way, including the Digital Asset Basic Act, which promises a clearer framework for the entire sector.
South Korea Has a High-Risk, High-Reward Mentality
It’s important to know that South Korea has a GDP near $2 trillion. The country also has deep ties to global markets, and Seoul’s capital flows move the needle. Billions leaving Tesla and flowing into crypto stocks boost liquidity for U.S. exchanges, mining firms, and token issuers. This extra liquidity improves the credibility of digital assets worldwide.
But it also adds volatility. Korean traders have shown a preference for leveraged products, which can magnify swings in global crypto prices. Their enthusiasm is already forcing fund managers and exchanges to tailor products specifically for them. In effect, South Korea is exporting its high-risk, high-reward culture into global markets. If that trend continues, investors everywhere may need to brace for a world where crypto, not Tesla, is the retail trade of choice.
Investors can track the prices of their favorite cryptos on the TipRanks Cryptocurrency Center. Click on the image below to find out more.
