Korea's AI-Driven Stock Market More Volatile Than Bitcoin

The volatility of Bitcoin's price movements has been outshone by that of South Korea's benchmark stock index, the KOSPI, this year. According to Bloomberg data, the daily returns of the KOSPI have swung a staggering 63% from their average pace in 2026, while Bitcoin's daily returns have only swung 48%. This disparity is largely due to the influence of two chipmakers, Samsung Electronics and SK Hynix, which supply memory chips for the AI boom. Their shares have surged rapidly, making up more than half of the KOSPI's weight.

The concentration of these two stocks in the index has turned Korea's benchmark into a leveraged bet on the AI market, tying its mood to Wall Street sentiment. When the KOSPI hit a record high in June, over 650 of its 831 constituent stocks actually fell. SK Hynix later lost 27% of its value in just three trading days due to concerns about data center spending.

The volatility has been exacerbated by individual investors holding leveraged exchange-traded funds (ETFs) that track Samsung and SK Hynix, amplifying the swings further. At their peak, these ETFs and underlying stocks accounted for more than 70% of daily trading value in Korea's stock market, which totals $3.4 trillion.

The Korea Exchange has been forced to halt trading nine times this year due to volatility, compared to just once in 2024. Finance Minister Koo Yun Cheol has acknowledged that regulators approved the leveraged products too quickly and have since pledged exposure caps and higher trading costs to curb retail risk.