KOSPI Volatility Surges Past Bitcoin Amid Cooling AI Rally

South Korea's benchmark KOSPI index has fallen nearly 25% over the past four weeks as enthusiasm for AI-related stocks has cooled. According to Odaily, options market data showed the KOSPI's 30-day implied volatility index rose to an annualized 81%, more than twice Bitcoin's volatility measure, BVIV, at about 38%. South Korean retail investors had previously used margin trading and leveraged ETFs to bet heavily on AI-related stocks, and the sharp swings triggered large-scale forced liquidations. Total liquidations linked to those trades have exceeded $2 trillion in less than three months, according to the article. Analysts said KOSPI's higher volatility than Bitcoin may reflect extreme risk appetite driven by the global AI investment boom. For Bitcoin supporters, BTC volatility below KOSPI has been seen as a sign of improving market maturity. Bitcoin still trades well above traditional assets in risk terms, with its 30-day volatility at about twice that of the S&P 500's VIX, which is below 20%. Bitcoin remains under pressure and is trading below its closely watched 50-day moving average. Nansen said wallet activity during recent geopolitical tensions did not show a clear move into stablecoins by the wallets that usually transfer funds first in large volumes. Nansen research analyst Nicolai Sondergaard said the pattern was similar to market behavior during previous Middle East escalations: short-term leveraged longs were liquidated before funds began accumulating again. Market participants are also watching an upcoming regulatory hearing in Washington. Marex analysts said the CLARITY Act faces a key test, while the crypto industry awaits clearer rules to support further institutional participation.