At first glance, the South Korean stock market, which has a scale of US$4.6 trillion, is full of signs of excitement. The surge of 200% in one year, far behind all other stock markets in the world, has shaken the hearts of South Korean people, who are borrowing record amounts of money to increase their bets on the stock market. Trading volume has also surged to record highs, and intraday fluctuations of 5% or more have become the norm - making the benchmark index Kospi the most volatile major stock index in the world.

The "short-term panic" permeating offices, cafeterias and family gatherings across the country is so intense that more and more investors are even buying stocks for their children: The number of new accounts opened by people under 18 in the first quarter of this year increased nearly ninefold from a year ago, according to data compiled by Toss Securities.

“Retail investor sentiment is extremely high, almost crazy,” said Jang Eunjung, a 37-year-old video blogger in Seoul. “Can we see this straight-up trend again?” As the stock market soared, the number of subscribers to her stock investing channel on YouTube grew from a handful to more than 1.3 million.

This wave of stock speculation is mainly driven by the core position of South Korean chip manufacturers in the AI ​​boom, and has turned a long-dormant market into the world's most watched AI fever vane.

While record profits from companies like Samsung Electronics and SK Hynix have been used by bulls to justify the rally, the risk of a sudden reversal of gains has also been on full display this week. On Tuesday, the Kospi index lost $300 billion in market value in 97 minutes, because a senior South Korean official published a long post on Facebook, talking about the possibility of using excessive taxes on AI profits to provide "citizen dividends" when the market was already worried that the rise had gone too far. However, by the close of trading, the decline had narrowed by more than half, and the government later clarified that the post was a personal opinion and not a policy.

"People who are afraid of being short may enter the market recklessly when they see others making big money, and often use excessive leverage. But no one knows when the bull market will end," said Kim Taewhan, who runs an ear, nose and throat clinic in Gangseo-gu, Seoul. The doctor started posting his investment returns on social media a year ago.

"The danger is that people often invest more in the final stages and lose money. I've experienced this myself - during the Bitcoin craze in 2018, I invested more at the top and ended up losing money," he added.

This round of rise in Korean stocks has few precedents in the country and even in the world. This leverage-driven frenzy has made it the seventh largest stock market in the world; the market value of heavyweight Samsung Electronics has also exceeded the US$1 trillion mark, ranking second in Asia.

This is inseparable from the return of South Korea’s 14 million day traders. They sat on the sidelines for much of 2025, but have now come back with many viewing the current rally as a once-in-a-lifetime move. They have invested about 37.7 trillion won ($25.3 billion) in domestic stocks so far this year. Foreign investors are retreating at an accelerated pace, with net sales nearly double that amount.

Foreign capital continues to outflow this month, making May likely to hit the third largest single-month net sales in history, second only to February and March.

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"More and more people believe that it is no longer possible to achieve class jump through traditional means and can only rely on speculative assets," said Jaewon Choi, an economics professor at Seoul National University. “After watching others get rich overnight through cryptocurrencies, investors are now flocking to stocks like SK Hynix, seeing them as better vehicles for building wealth quickly.”