Kospi Volatility Tops 60%, Swinging More Than Bitcoin

South Korea’s Kospi index has become so volatile that it is now swinging more wildly than Bitcoin. The turbulence reflects an AI investment boom concentrated in Samsung Electronics Co. and SK Hynix Inc., along with a sharp rise in leveraged exchange-traded funds.

The Kospi’s volatility has exceeded 60% this year, Bloomberg reported on July 20. That is nearly twice the level of Japan’s Nikkei 225 and above Bitcoin, which is known for sharp price swings. The Korea Exchange has triggered marketwide circuit breakers seven times this year through mid-July, up from none in 2025 and one in 2024.

Samsung Electronics and SK Hynix are at the center of the index’s sharp moves. The companies supply memory chips critical to AI systems and have delivered explosive earnings growth. As the AI boom drove their shares higher, their combined weighting in the Kospi rose above 50%. Even on the day the Kospi hit a record high in late June, more than 650 of its 831 constituents fell.

The rapid expansion of the leveraged ETF market has added to the volatility. Goldman Sachs strategists wrote in a report in late June that assets in South Korean index and single-stock leveraged ETFs had surged to more than $40 billion from $5 billion at the start of the year. They called leveraged ETFs the biggest risk to watch. Daily trading in those funds and their underlying shares accounts for more than 70% of turnover in the Kospi market.

South Korean retail investors have poured more than 100 trillion won, or about $72.5 billion, into the Kospi this year. Foreign investors, by contrast, have been net sellers of about $108 billion of Kospi stocks over the same period, with more than $40 billion leaving SK Hynix alone.

Authorities have also moved to cool the market. South Korean financial regulators said on July 16 that they would temporarily halt new listings of single-stock leveraged products. Gary Tan, a portfolio manager at Allspring Global Investments, said he remains cautious about calling a bottom because leverage was a key driver of the second-quarter rally in memory-chip shares.