The South Korean stock market experienced a remarkable surge, with the KOSPI index climbing 4.56% to a historic peak of 8,457. This milestone reflects a year-to-date increase of 100% as of mid-2026, primarily driven by the robust performances of major chipmakers Samsung Electronics and SK Hynix. Together, these companies account for approximately half of the KOSPI index’s weight.
In just one trading session, the benchmark added around $220 billion in market capitalization, contributing nearly $900 billion in value throughout May alone. The explosive growth of KOSPI has underscored a strong demand for AI memory chips, with Samsung Electronics increasing by 6.5% and SK Hynix soaring 9.5% on the same day. Market observers noted a “vertical” rise in memory stocks, highlighting the ongoing trend.
JPMorgan has responded to this unprecedented growth by raising its price target for the KOSPI to 9,000, with an optimistic bull case projection reaching as high as 10,000. This has captured the attention of investors both domestically and abroad.
The momentum is further reflected in the growing appetite of retail investors for leveraged exchange-traded funds (ETFs), specifically focused on SK Hynix and Samsung. In Hong Kong, the 2x Leveraged SK Hynix ETF has attracted $1.3 billion this year alone, tripling its assets to $8 billion in just three months. This ETF has now become the world’s largest single-stock leveraged ETF, surpassing comparable products for other tech giants such as Tesla and Microsoft.
Meanwhile, the trend is drawing Asian retail investors into chip stock bets at an unprecedented rate. This enthusiasm is a stark contrast to the recent slump in the Korean cryptocurrency market, which has seen trading volumes plummet by about 80%. Previously, the same retail investors were key players in Korea’s Bitcoin market, with platforms like Upbit and Bithumb handling around 96% of local crypto activity.
The weakening interest in cryptocurrencies is evident, as local demand for Bitcoin is reflected in a negative kimchi premium of 2.19%. Despite previous KOSPI corrections prompting a reallocation back to crypto, the latest figures indicate a strong rotation towards equities, leaving crypto volumes in decline.
In light of these dynamics, plans are underway from a consortium of eight banks, spearheaded by leading institutions such as Kookmin, Shinhan, and Woori, to introduce a regulated won-pegged stablecoin, in accordance with the Digital Asset Basic Act. This initiative aims to retain liquidity within the local economy, as a significant amount of capital, approximately $40 billion, has reportedly exited Korea’s crypto exchanges in the first quarter alone.
With the KOSPI’s rapid ascent, investors are on high alert. The market is heavily leveraged, with nearly 10 million individuals invested in cryptocurrencies, representing over 30% of the population. Should there be a downturn—triggered by a dip in chip orders or shifts in the won’s value—it could lead retail investors back into the crypto space, refocusing their attention on Bitcoin and other altcoins. Such a scenario could lead to a swift rebalancing of market dynamics in South Korea, where investor sentiment remains fragile amid the soaring equity market.
