Crypto leveraged ETF investments… Korean retail investors' holdings halved in a month

'T-Rex 2X Long' $182.85 million purchased

Losses grow as crypto-related stocks plunge

Korean retail investors' U.S. virtual asset (cryptocurrency)-related stocks, which they recently bought heavily, have plunged one after another. The effect is due to reduced risk appetite as global market uncertainty has increased. In particular, many individual investors invested in leveraged exchange-traded funds (ETFs), so the scale of losses is expected to be large.

According to the Korea Securities Depository on the 13th, among the top 50 overseas stocks that domestic investors net-bought the most over the past month (Oct. 13–Nov. 12), nine were cryptocurrency-related stocks. The net buying amount of these nine stocks totaled $1.18726 billion, about 1.7444 trillion won. This is the result of related stocks rallying after the 'Genius Act,' which focused on stablecoin legislation, passed in July.

Among the nine stocks, Bit Mining's net-buying volume was the largest. During the period, $308.83 million (about 453.8 billion won) was net-bought, ranking 4th overall in net purchases. Bit Mining is a company that holds large amounts of Ethereum, reportedly holding a total of 3.5 million Ether. However, Bit Mining's share price fell 28.64% over the past month.

Many Korean retail investors also invested in leveraged ETFs. Leveraged ETFs are structured to track twice the daily return of the underlying asset, so losses are also magnified in a downturn. '2X Ether (ETHU),' which tracks Ethereum's price at twice, attracted $265.6 million (about 389.6 billion won) in one month, but its share price plunged 40.26% over the same period.

T-Rex 2X Long Bit Mining Daily Target (BMNU), which invests in Bit Mining, and T-Rex 2X Long Strategy Daily Target (MSTU), which invests in Strategy (formerly MicroStrategy), saw net inflows of $182.85 million (about 268.2 billion won) and $116.66 million (about 171.1 billion won), respectively; however, these products also fell more than 50% in a month.

The background to the widespread decline in cryptocurrency stocks is the widening uncertainty in global financial markets. With the U.S. announcing additional tariffs on China and the added concern of a federal government shutdown, investors are turning to safe-haven assets such as gold.

Reporter Yang Ji-yoon yang@hankyung.com