TLDR:

• Korean retail poured $40B into U.S. leveraged ETFs in 2025, with $7B flowing in December alone.
• South Korean regulators imposed training rules to limit retail access to 2x and 3x offshore ETFs.
• The KOSPI has rallied 177% over the past year, driven largely by semiconductor stocks.
• Volatility is rising at market highs, signaling stretched positioning through aggressive leverage.

South Korea’s stock market is sitting on a $40 billion leverage position in U.S. tech assets. The KOSPI has surged 177% over the past year. 

On the surface, semiconductor giants Samsung and SK Hynix drove most of that momentum. But a deeper look reveals a retail-driven leverage story that regulators are already scrambling to address.

Korean Retail Floods U.S. Leveraged ETFs at Historic Pace

Korean retail investors allocated $40 billion into U.S. leveraged ETFs throughout 2025. Of that total, $7 billion entered in December alone. 

The pace alarmed South Korean financial regulators enough to intervene directly. Authorities imposed mandatory training and mock trading requirements to restrict retail access to these instruments.

The same investor class that fueled the crypto “Kimchi Premium” has rotated into equities. Their appetite for high-risk, high-return products has not cooled. They simply shifted the arena. The move has concentrated enormous exposure into 2x and 3x U.S. tech ETFs.

This is not a niche segment of the market. Korean retail is widely recognized as one of the most active investor bases globally. Their capital flows carry real weight in offshore markets. At $40 billion, their U.S. ETF positioning is now systemically relevant.

The regulatory response confirms the scale of concern. Training requirements and mock trading rules are unusual interventions. They signal that authorities view the current behavior as a structural risk, not just speculative excess.

Rising Volatility at Market Highs Signals Stretched Positioning

Volatility is climbing even as the KOSPI holds near euphoric highs. That combination is historically unusual. Volatility typically spikes during market bottoms, not tops. When it rises alongside highs, it often reflects aggressive call buying and overextended leverage.

According to data flagged by Bull Theory, the current setup involves three overlapping risk layers. A 177% domestic rally almost entirely dependent on semiconductors. 

Forty billion dollars parked in highly leveraged offshore tech products. And volatility expanding while prices stay elevated.

If U.S. tech corrects, Korean retail faces pressure on both fronts simultaneously. Their KOSPI holdings decline on weaker chip export expectations. Their leveraged U.S. ETF positions amplify losses in real time. The two portfolios move against them at once.

Seoul’s market is now directly tethered to Nasdaq price action, according to Bull Theory’s analysis. Korean retail has become a significant marginal buyer of high-beta U.S. tech. That linkage runs both ways.

Mark Karpelès, the former CEO of Mt. Gox, is calling on community support for a proposal to recover more than $5.2 billion stolen from his Bitcoin exchange more than a decade ago.

On Friday, Karpelès submitted a proposal on GitHub to add a consensus rule that would allow the 79,956 Bitcoin hacked from Mt. Gox (currently sitting in a single wallet) to be moved to a recovery address without the original private key. 

“These coins have not moved in over 15 years. They are among the most well-known and publicly tracked UTXOs in Bitcoin’s history,” he wrote. 

Karpelès said that with Mt. Gox trustee Nobuaki Kobayashi already overseeing distributions to creditors, if the coins were recoverable, the existing legal and logistical framework would distribute them to their rightful owners. 

“I want to be upfront: this is a hard fork. It makes a previously invalid transaction valid. All nodes would need to upgrade before the activation height. I’m not trying to disguise that fact or sneak it through as something else,” he added.

However, Karpelès said the proposal wasn’t intended to bypass the Bitcoin development process; instead, it was an attempt to start a discussion with the Bitcoin community. 

“The MtGox trustee has declined to pursue on-chain recovery, citing the uncertainty of whether such a consensus change would ever be adopted,” he said. 

“This creates a deadlock: the trustee won’t act without certainty, and the community can’t evaluate the idea without a concrete proposal. This patch breaks that deadlock by providing something concrete to discuss.”

Bitcoin immutability at risk, say critics 

Karpelès’ proposal saw strong opposition on the online forum Bitcointalk, with most arguing that it would set a bad precedent for Bitcoin, a decentralized cryptocurrency intended to be irreversible and immutable. 

“Each time a hack incident [happens], someone will call for another new consensus rule to recover stolen funds. This will destroy the bitcoin concept in full,” wrote “coupable,” who has been a member of the forum since 2015. 

“Bitcoin should be independent from what Law Enforcement decides in any [jurisdictions],” said another forum member known as “PrivacyG.”