As South Korean stocks retreat amid concerns about AI investment, Bitcoin’s recovery in recent months has raised the question of whether investors pulling away from the market will turn to crypto.
According to a CoinDesk analysis, South Korea’s KOSPI index fell 5.5% in Asian trading on October 13, leaving it about 38% below its record high in June. Bitcoin, meanwhile, climbed to as high as $87,000 after hitting a low of about $58,000 shortly after the KOSPI peaked.
The increase between those two price levels amounts to about 50%. The chart accompanying the analysis showed Bitcoin at about $83,365; $87,000 was the level it reached during the recovery.
Bitcoin and Korean stocks are moving in opposite directions
The chart showed the correlation indicator between Bitcoin and the KOSPI at -0.41. A negative value indicates that the two assets moved moderately in opposite directions over the period measured.
The CoinDesk analysis suggests that reducing risk allocated to AI investments could create an opportunity for Bitcoin. However, the inverse price movement supporting this possibility does not provide capital-flow data showing that money leaving the stock market is moving into Bitcoin.
Chipmakers’ losses deepen
Behind the selloff are concerns about whether the massive spending on AI infrastructure can deliver sufficient returns. According to the Financial Times, Broadcom CEO Hock Tan compared speculative AI investments to gambling in a casino.
A Bloomberg report said that Chinese memory chipmaker CXMT’s progress has heightened concerns about competition and pressure on manufacturers’ profit margins.
SK Hynix fell about 10%, while Samsung Electronics dropped 7%, as the selloff spread to premarket trading in the United States. Shares of memory and storage chipmakers Micron Technology and SanDisk fell about 3%.
Not investment advice.