Bloomberg ETF analyst says South Korean politicians are using 2x leveraged ETFs to attack the government

Bloomberg ETF analyst Eric Balchunas said South Korean politicians are using 2x leveraged ETFs as a line of attack against the government, following criticism raised at a hearing. In a post on X, Balchunas cited People Power Party lawmaker Lee Jongwook, who told Koo that the country had turned into a casino and that such products should never have been allowed into the market, calling the situation a policy failure. Balchunas argued that the bubble and subsequent pullback were driven instead by the AI boom, which sparked heavy market interest in memory chip makers. In his view, 2x leveraged ETFs were only a vehicle for gaining that exposure. He also said South Korea may not be the best market for 2x single-stock ETFs because the underlying shares lack sufficient liquidity, making it easier for derivatives to feed back into and affect the underlying stock.