Leverage Sword Over AI Bull Market: US Margin Debt Hits Record $1.4T, Korea Circuit Breaker Triggered

News Editor

2026-06-29 17:31:37

The global AI bull market hides alarming leverage risks: US margin debt reached a record $1.4 trillion, leveraged ETF assets doubled to $220 billion in two months, while South Korea's KOSPI index experienced violent swings triggering a circuit breaker due to high leverage and concentrated holdings. Barclays and Morgan Stanley warn that leveraged derivatives could trigger a negative spiral of deleveraging, amplifying market declines.

AI bull marketleverage riskUS margin debtleveraged ETFKOSPIcircuit breakerdeleveragingMorgan Stanley

Leverage Risks Loom Over AI Rally

The global AI bull market is galloping ahead, but the underlying leverage risks have raised red flags. Latest data shows US margin debt has surged to $1.4 trillion, a historic peak, while leveraged ETF assets have doubled in the past two months to $220 billion. In Asia, South Korea's KOSPI index experienced sharp volatility and triggered a circuit breaker, driven by excessive leverage and concentrated positions.

Major investment banks have issued warnings. Barclays and Morgan Stanley cautioned in recent reports that concentrated unwinding of leveraged derivatives could spark a negative deleveraging spiral, further amplifying market declines. Market participants should brace for potential liquidity tightening and cascading effects.

This article was originally published by Bit.Fan. For more cryptocurrency news and market insights, visit www.bit.fan.

400

Disclaimer:

The market information, project data, and third-party content displayed on this platform are for industry information sharing only and do not constitute any form of investment advice or return commitment.

Cryptocurrency trading carries high risks. Users should fully assess their risk tolerance and make independent decisions. All profits, losses, and legal responsibilities are borne by the users themselves.