KOSPI Volatility Soars Past Bitcoin Amid AI Sector Dominance
The annualized volatility of South Korea's KOSPI index has reached an unprecedented 63%, surpassing even that of Bitcoin, which is typically seen as a highly volatile asset. According to Bloomberg and market data, this extreme volatility is largely due to the dominance of AI concept stocks like Samsung and SK Hynix in the KOSPI, which account for over half of its total market capitalization.
Furthermore, the recent surge in KOSPI volatility can be attributed to the widespread adoption of single-stock leveraged ETFs, which amplify stock price fluctuations. In contrast, Bitcoin's volatility has decreased significantly with the rollout of spot ETFs and growing institutionalization, now ranging around 40-50%.
Economist Steve Hanke commented on social media platform X that South Korea's benchmark stock index has become the most volatile in the world, stating 'South Korea, as an artificial intelligence leader, clearly flew too high, and the result is reaping what it sowed.'