$19 Billion AI Bet Backfires as Korean Retail Suffers Worst KOSPI Crash Since 2008
South Korea's small investors bet $19 billion on leveraged AI chip funds. Months later, the trade has collapsed. The KOSPI crash erased a third of the index since June, the deepest slide since the 2008 global financial crisis.
About $1.59 trillion in market value is gone. Samsung Electronics and SK Hynix, the index's two heavyweights, drove 76% of that loss. Now the Bank of Korea (BOK) is signaling more rate hikes.
How the KOSPI Crash Wiped Out a $19 Billion Leveraged Bet
Leveraged single-stock exchange-traded funds (ETFs) double one stock's daily move. Gains land twice as fast. So do losses.
Since mid-2025, investors poured over $19 billion into such funds tracking memory chipmakers. Bloomberg figures show SK Hynix products alone drew $10.8 billion. That is more than double Samsung's total.
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