Korean Stock Market Volatility Surpasses Bitcoin, KOSPI Drops Nearly 25%

The South Korean stock market has experienced significant volatility recently, with the KOSPI index falling nearly 25% over the past four weeks due to a cooling off in AI investment enthusiasm. The 30-day implied volatility (IV) of the KOSPI has risen to an annualized 81%, more than double the Bitcoin volatility index (BVIV) of approximately 38%. Retail investors have been betting on AI stocks through margin trading and leveraged ETFs, leading to large-scale forced liquidations, with the related clearing amount exceeding $2 trillion. Analysts point out that the volatility of the Korean stock market surpassing that of Bitcoin reflects an extreme level of risk appetite driven by the global AI investment boom. The lower volatility of Bitcoin compared to the KOSPI is seen as a sign of market maturity, yet its volatility remains higher than that of traditional assets. Currently, the price of Bitcoin is below the market-focused 50-day moving average, and on-chain data provider Nansen indicates that funds have not significantly flowed into stablecoins amid geopolitical tensions. The market is paying attention to the upcoming regulatory hearing in Washington, D.C., with Marex analysts noting that the CLARITY Act is facing a crucial test, as the crypto industry awaits a clear regulatory framework to encourage institutional funds to enter the market.