The selloff that began in U.S. technology stocks continued to Asian markets on Tuesday. South Korea’s Kospi closed down 10%, its fourth circuit breaker of the year – after none in 2025 – as chip giants Samsung Electronics and SK Hynix fell more than 12% and foreign investors dumped over $2.5 billion of shares.
Bitcoin is holding far better, easing toward $63,000, the low end of its recent range, per CoinDesk data.
Forced selling hit Korean retail traders using borrowed money, compounded by leveraged exchange-traded funds tracking the two chip stocks, which multiply a stock’s daily move through borrowing and magnify the swings on the way down.
One fund targeting twice the daily return of SK Hynix lost more than 25%, Bloomberg reported. Korea’s volatility gauge spiked toward 90.
Samsung and SK Hynix are global proxies for AI chip demand, so their slide is the same trade that hit SpaceX and the Nasdaq this week, with investors reassessing whether the enormous spending on AI will pay off.
Forced-liquidation cascades have long been crypto’s signature, and this week they are tearing through leveraged stock markets while bitcoin stays orderly.
Part of the reason is local. Korean retail traders, once a major force in crypto, have largely shifted to leveraged stock bets, and crypto now makes up only about 8% of Kospi volume, so the equity panic had little direct crypto selling to feed.
The calm may not hold, however.
Bitcoin and risk assets remain closely linked, so a deeper unwind in the AI trade could eventually test it in the coming days.