South Korean Stock Market Crash Triggers $286 Million in Forced Liquidations, But Upbit Trading Volume Surges 1426%
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South Korean Stock Market Crash Triggers $286 Million in Forced Liquidations, But Upbit Trading Volume Surges 1426%
Capital is flowing from traditional markets to the crypto market.
Navigating Web3 tides with focused insightsAuthor: Korea Economic Daily
Compiled by: TechFlow
TechFlow Editor's Note: A deep correction in the Korean stock market triggered massive leveraged liquidations, causing heavy losses for retail investors who borrowed money to trade stocks. In sharp contrast to the stock market, trading volume on cryptocurrency exchange Upbit surged more than 14 times during the same period, indicating capital is flowing from traditional markets to the crypto market.
"No Money Left to Buy the Dip"... Retail Investors Who Borrowed to Trade Stocks Collapse After Losing 400 Billion Won
Although the Korea Composite Stock Price Index (KOSPI) broke through the "9,000 points" barrier and continuously refreshed historical highs, concerns about "borrowing money to trade stocks" are intensifying both inside and outside the market. The scale of credit transactions and overdraft loans continues to expand.
With the recent deep correction in the stock market, retail investors using leverage have suffered heavy blows. On the 14th, the amount of forced liquidations reached 400 billion won (approximately $286 million), hitting a recent high.
At the same time, trading volume on cryptocurrency exchange Upbit saw astonishing growth, soaring 1426% compared to usual, showing investors are seeking alternative investment channels outside the stock market.
Nightmare for Leveraged Retail Investors
"Buying Samsung Electronics and SK Hynix guarantees profit"—in a bull market, retail investors borrowing money to go all-in emerged in large numbers. But as the market suddenly turned, these high-leverage investors became the biggest victims.
Many investors stated: "I wanted to buy the dip, but I couldn't even come up with the money to buy the dip." Losses caused by forced liquidations are already irrecoverable.
Capital Floods into Crypto Market
Interestingly, while the stock market encountered a wave of forced liquidations, trading volume on South Korea's largest cryptocurrency exchange Upbit saw explosive growth. Data shows trading volume surged 1426% compared to daily levels, indicating large amounts of capital are flowing from the traditional stock market to the cryptocurrency market.
This phenomenon reflects that under the pressure of high-level corrections in the stock market, some investors choose to switch to the cryptocurrency market, which has greater volatility but stronger liquidity.
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