Korean investors face stress after AI bubble bursts, and crypto markets are watching closely

South Korean retail investors are learning a painful lesson that crypto traders already know by heart: leverage and hype make for a brutal hangover. After pivoting en masse from memecoins to AI-linked equities in late 2025, Korean retail investors rode the KOSPI index to a nearly 180% surge in roughly 10 months. Then the whole thing came crashing back down. By mid-2026, the KOSPI had shed nearly 25% in just four weeks. The stress levels among Korean retail investors are now reportedly elevated. From memecoins to semiconductors and back again In late 2025, Korean investors began what some have called the “Great Korean Pivot,” abandoning cryptocurrency trading, particularly memecoins, in favor of equities tied to artificial intelligence infrastructure. The primary beneficiaries were semiconductor giants SK Hynix and Samsung Electronics. Trading volumes on domestic crypto exchanges like Upbit and Bithumb plummeted as money flowed out of digital assets and into stock portfolios. Leveraged single-stock ETFs tracking SK Hynix and Samsung Electronics had attracted tens of billions in assets. When the correction hit, forced liquidations cascaded through the market. March 2026 was particula...