According to Bloomberg, South Korea’s KOSPI index has experienced a volatility rate exceeding 60% this year, higher than Bitcoin. The Korean exchange has triggered its circuit breaker mechanism seven times as of mid-July this year. Samsung Electronics and SK Hynix together account for over 50% of the KOSPI index’s weight, making its performance highly dependent on a few major semiconductor stocks. Assets in South Korea’s leveraged ETFs have grown from $5 billion at the start of the year to over $40 billion; products tied to Samsung Electronics and SK Hynix collectively represent more than 70% of daily trading volume on the Korean stock market. On July 16, South Korean regulators suspended the listing of new single-stock leveraged products. This year, individual investors in South Korea have poured over 100 trillion Korean won into KOSPI stocks, while foreign investors have net sold approximately $108 billion during the same period, including over $40 billion withdrawn from SK Hynix. Goldman Sachs views leveraged ETFs as a major risk in the Korean market.
KOSPI Volatility Surpasses Bitcoin as Leveraged ETFs Drive Risk in the South Korean Market
AiCoinShare
Summary
Market volatility in South Korea has surged, with the KOSPI index experiencing swings of over 60% this year—outpacing Bitcoin. The index has triggered circuit breakers seven times by mid-July. Samsung and SK Hynix dominate the KOSPI, accounting for more than half of its weight. Leveraged ETF assets have skyrocketed from $50 billion to $400 billion, with related products and these two chipmakers representing over 70% of daily trading volume. Regulators halted new single-stock leveraged ETF listings on July 16. Retail investors poured 100 trillion won into the KOSPI, while foreign investors sold $108 billion, including $40 billion worth of SK Hynix shares. Goldman Sachs has identified leveraged ETFs as a key risk.
Source:Show original
Disclaimer: The information on this page may have been obtained from third parties and does not necessarily reflect the views or opinions of KuCoin. This content is provided for general informational purposes only, without any representation or warranty of any kind, nor shall it be construed as financial or investment advice. KuCoin shall not be liable for any errors or omissions, or for any outcomes resulting from the use of this information.
Investments in digital assets can be risky. Please carefully evaluate the risks of a product and your risk tolerance based on your own financial circumstances. For more information, please refer to our Terms of Use and Risk Disclosure.