South Korea’s virtual asset market contracted sharply in the first half of 2026 as bitcoin’s decline weakened valuations, trading activity and exchange earnings. The total appraised value of cryptocurrencies fell 33% to 58.9 trillion won ($42 billion) at end-June from 87.2 trillion won at the end of last year, while average daily trading volume dropped to 3.1 trillion won from 5.4 trillion won. Bitcoin fell 33% to $58,559 over the period. Financial regulators linked the selloff to inflation pressure from the war between the United States and Iran, which delayed expectations for interest-rate cuts and increased risk aversion. Exchange operating income fell 78% to 81.6 billion won, with won-denominated customer deposits declining to 5.2 trillion won from 8.1 trillion won. The number of deduplicated listed cryptocurrencies fell to 673 from 712, and 93 of 234 assets listed on only one exchange had appraised values of 100 million won or less. Tradable accounts edged up to about 11.17 million, although 77.2% held less than 1 million won in assets.