South Korean equities have become more volatile than Bitcoin as the AI investment boom cools, pushing risk in the local stock market above an asset long known for sharp price swings.
Data cited in the report showed the Korea Composite Stock Price Index, or KOSPI, fell nearly 25% over the past four weeks as AI-linked stocks lost momentum. In the options market, KOSPI’s 30-day implied volatility index climbed to an annualized 81%, more than double the roughly 38% level of BVIV, a Bitcoin volatility gauge.
Retail leverage amplified the sell-off
According to the report, South Korean retail investors had heavily bet on AI-related stocks through margin trading and leveraged exchange-traded funds. As volatility picked up, those positions triggered large-scale forced liquidations. The liquidation total tied to the trade has exceeded $2 trillion in less than three months.
Analysts said KOSPI volatility moving above Bitcoin may reflect how far risk appetite driven by the global AI investment wave had stretched. For Bitcoin backers, BTC trading with lower volatility than KOSPI was seen as a sign that the market has matured.
Bitcoin still trades as a higher-risk asset than traditional markets
That said, Bitcoin remains well above traditional assets in risk terms. Its 30-day volatility is about twice the level of the Cboe Volatility Index, or VIX, which is below 20%. Bitcoin is also still under pressure in price terms, trading below the 50-day moving average that many in the market are watching.
Nansen says stablecoin rotation has not been obvious
Blockchain data firm Nansen said that during the recent period of geopolitical tension, wallets that usually move capital first at scale did not show a clear shift into stablecoins.
Nansen research analyst Nicolai Sondergaard said the pattern resembled earlier market action seen during the escalation in the Middle East: "Short-term leveraged longs were liquidated, and then capital started to accumulate again."
Washington hearing draws market attention
The market is also watching an upcoming regulatory hearing in Washington. Analysts at Marex said the CLARITY Act is facing a critical test, with the crypto industry waiting for a clearer regulatory framework that could help bring in more institutional capital.