South Korea's small-cap stock index accelerated its decline as investors shifted from the stock market to Bitcoin-related assets. Bitcoin has soared nearly 35% since Trump won the U.S. election on Nov. 5, while South Korea's small-cap Kosdaq index has fallen 8%, making it likely to be the worst-performing Asian stock index this year.
Analysts say the Kosdaq's decline has been accelerated in part by small investors switching from stocks to Bitcoin. Ahn Hyunsang, CEO of the Korea Investment Research Institute, said:
“Because the KOSDAQ market is doing so poorly, people are turning to the token market.”
Since the Korean market prohibits domestic brokers from conducting overseas Bitcoin ETF transactions, local investors have turned to leveraged funds that bet on Bitcoin futures, or bought MSTR, the "Bitcoin shadow stock" in the US stock market.
However, after Bitcoin hit the $100,000 mark and was blocked, the market began to worry about whether its rise could continue.
Wall Street News previously mentioned that the Bitcoin futures ETF-SBIT, which is 2 times short of Bitcoin, achieved a net inflow of US$18.8 million on Monday, the highest level since its launch in April.