Derivatives Begin to Drive Spot Markets: South Korea's Asset Pricing Power is Flowing Out

The trading volume of perpetual contracts in August reached 166 trillion, nearly four times that of South Korea's five major exchanges.

Written by: Tiger Research

Compiled by: AididiaoJP, Foresight News

Cryptocurrency exchanges are entering traditional assets such as stocks and commodities through perpetual contracts. The trading volume of perpetual contracts linked to South Korean stocks has reached 307 trillion won in just a few months. This report outlines the rise of offshore liquidity and the conditions South Korea needs to meet to participate in this market.

Core Conclusions

• Cryptocurrency exchanges are rapidly entering traditional assets such as stocks and commodities through perpetual contracts.
• The trading volume of perpetual contracts linked to South Korean stocks has reached approximately 307 trillion won in a few months, highlighting the increasing importance of the offshore market.
• South Korea needs to allow companies to access local cryptocurrency exchanges, establish a formal derivatives framework, and improve the infrastructure for stablecoins in won.

Cryptocurrency Exchanges are Entering Traditional Markets

Cryptocurrency exchanges are no longer limited to digital assets. Bitcoin and Ethereum once dominated trading on these platforms, but products linked to traditional assets such as stocks and commodities are rapidly increasing.

The decentralized exchange Hyperliquid has seen a continuous rise in the proportion of traditional asset-linked products in its trading structure for 2026, with an increasing number of users trading these products. The infrastructure originally built for cryptocurrency trading is transforming into a new venue for traditional financial markets.

Driving this change are perpetual contracts. These derivatives allow investors to gain price exposure without holding the underlying assets. Unlike traditional futures, they have no expiration date and do not require physical delivery.

As a result, exchanges can relatively easily launch products linked to stocks and commodities, and cryptocurrency exchanges have found a viable path: extending from digital assets into traditional markets.

South Korea is No Exception: Korean Stock Trading is Flowing Offshore

South Korea is at the center of this change. Offshore cryptocurrency exchanges are actively trading perpetual contracts linked to core South Korean stocks such as Samsung Electronics and SK Hynix. These products can be traded at night and on weekends, with high leverage, providing South Korean investors and global funds with a new exposure to Korean stocks. An offshore market that allows direct trading of Korean stock price fluctuations without the restrictions of Korean trading hours is rapidly taking shape.

The scale is growing quickly. From February to August 2026, the trading volume of perpetual contracts linked to South Korean stocks reached approximately 307 trillion won. In August alone, it reached 166 trillion won, nearly four times the trading volume of 42 trillion won from South Korea's five major cryptocurrency exchanges during the same period. In just a few months, the offshore perpetual market linked to South Korean stocks has surpassed the scale of the major local cryptocurrency markets.

For some products, the trading volume of perpetual contracts has far exceeded that of the corresponding ETFs. In August 2026, the trading volume of perpetual contracts linked to the 3x leveraged Korean ETF (KORU) listed in the U.S. was approximately 24.1 billion USD, while the KORU ETF itself had a trading volume of 8.9 billion USD, making the former about 2.7 times the latter. This means that the trading volume of derivatives has already surpassed that of the ETFs themselves. Once derivatives trading exceeds the underlying market, offshore venues may play a larger role in price discovery.

More critically, the offshore derivatives market can also inversely affect the spot market. Market makers providing liquidity for perpetual contracts will hedge their exposure by buying and selling related stocks or ETFs. The higher the trading volume of derivatives, the more such hedging transactions occur; this will also amplify during periods of price volatility. These capital flows will ultimately transmit to spot prices.

This structure may create a "tail wagging the dog" scenario: it is not the spot market that drives derivatives, but rather derivatives that drive the spot market. For large-cap stocks like SK Hynix, spot trading is still significantly larger, and the impact is temporarily limited. However, the gap between derivatives and spot trading volumes is rapidly narrowing, and this trend deserves continued attention.

Global Markets are Changing, Liquidity is Moving Offshore

Offshore trading of Korean stocks is not a phenomenon unique to South Korea. Perpetual contracts are rapidly being rolled out on stocks and indices in South Korea, Japan, and China, extending beyond listed companies. Offshore venues have launched perpetual contracts linked to unlisted companies such as Anthropic and have also introduced products linked to the unlisted Chinese memory chip company Changxin Storage (CXMT). Assets that were previously difficult to trade through traditional securities markets are entering the perpetual contract market. What investors can trade is rapidly blurring traditional boundaries.

Participants are also changing. In accounts on Hyperliquid with assets exceeding 10 million USD, the proportion of trading in traditional assets such as stocks and commodities is rapidly increasing. The Wall Street Journal has also reported that professional traders on Wall Street are using perpetual contracts outside of regular trading hours and on weekends. This market, once dominated by cryptocurrency investors, is now beginning to attract professional traders and investors managing large amounts of capital.

Liquidity itself is also worth noting. According to the average over the last 15 days, a trading volume of 1 million USD on SK Hynix perpetual contracts has a slippage of only single-digit basis points. Even outside of regular trading hours, the slippage remains relatively low. This means that even when the South Korean stock market is closed, this market has sufficient depth to accommodate large orders. Perpetual contracts are no longer just about "extending trading hours"; they are developing their own liquidity.

The funds used for trading are also changing. Some global exchanges have accepted tokenized U.S. Treasury bonds as collateral, including BlackRock's BUIDL and Hashnote's USYC. Over the past year, the cumulative scale of USYC entering exchanges has been approximately 2.75 billion USD. Not all of this is used as collateral for derivatives, but institutions can hold familiar U.S. Treasury-like assets and use them as trading collateral when needed. Traditional financial assets are beginning to serve as collateral in these new markets, creating a new channel for funds to flow between traditional finance and new trading markets.

What we see now is not just the expansion of the cryptocurrency market into traditional assets. An offshore market that can trade Korean stock prices without going through the won, local brokers, and the Korean exchange is rapidly growing. Tokenized U.S. Treasury bonds are serving as collateral here, and professional traders and large fund management institutions have also entered the market. The changes are not limited to trading targets; the participants and forms of capital are also being rewritten.

The trading volume of perpetual contracts linked to South Korean stocks has reached 307 trillion won in just a few months. This figure indicates that changes are happening rapidly. However, 307 trillion won does not represent the scale of a mature market; it is merely the current scale of a market that is still taking shape. If more assets become tradable and institutional funds enter on a large scale, offshore liquidity may continue to expand. The long-standing market structure divided by national borders and trading hours, as well as the ways funds flow across markets, may all be rewritten.

The Offshore Market is Growing, What Role Can South Korea's Financial Industry Play?

South Korea can restrict its domestic investors from trading such products, but it is difficult to stop the growth of the offshore market itself. Some global exchanges, including Binance, will restrict perpetual contract trading for accounts identified as South Korean users through KYC. However, the market linked to South Korean stocks can still expand through overseas investors and global funds. The reality is that South Korean regulations are more focused on limiting the participation of domestic investors and financial institutions rather than the offshore market itself. Even if domestic demand is suppressed, trading and liquidity may still grow overseas.

Therefore, South Korea should not only think about blocking this trend but also turn the growth of the new market into an opportunity for its financial industry. South Korea is not starting from scratch: local cryptocurrency exchanges. Although they cannot directly launch perpetual contracts linked to stocks in the short term, they already have experience operating a 24-hour digital asset market and a considerable user base. These conditions can support the extension into new markets. Global cryptocurrency exchanges are rapidly entering traditional assets, and South Korea should also examine the rules and market structures needed to support this transition.

However, trading infrastructure alone is not enough. South Korea also needs companies to be able to access the market, a derivatives regulatory framework, and payment and settlement infrastructure denominated in won. Corporate accounts can introduce the professional capital needed for market making, hedging, and arbitrage, and can also supplement liquidity. A formal framework for derivatives such as perpetual contracts is necessary to support products linked to a broader range of assets. Payment and settlement tools like stablecoins in won can lower the entry barriers for overseas investors and facilitate capital inflows and outflows. These are not separate regulatory issues but are complementary conditions necessary for the market to operate.

What South Korea needs is a framework that allows these elements to operate in coordination, rather than piecemeal fixes. This way, South Korean cryptocurrency exchanges can have the opportunity to move beyond simple cryptocurrency trading and connect a broader range of assets with global liquidity. Trading linked to South Korean assets is already growing rapidly offshore. The real question is not how to stop this growth, but how much of a position South Korea's financial industry can occupy in this market.