KOSPI Crash: $2 Trillion Wiped Out as South Korea's Stock Market Implodes

The KOSPI index in South Korea has crashed by over 40% from its all-time high just six weeks ago, wiping out around $2 trillion in market value. This collapse is a significant event not only for Korean markets but also for global crypto traders, as it affects the retail capital that flows into digital assets.

The KOSPI index is the benchmark for South Korea's main stock exchange, and its collapse has been described as the most violent equity crash in the country's history. The two dominant chipmakers, Samsung Electronics and SK Hynix, account for nearly half of the index weighting, making it a leveraged bet on these companies' performance.

The AI trade unwind is one of the key factors contributing to the KOSPI collapse. Global doubts about the sustainability of AI infrastructure spending have hit an index where two chipmakers dominate. The market's reaction has been amplified by record leverage and margin loans, as well as retail investors piling into single-stock ETFs tied directly to Samsung and SK Hynix.