Tom Lee, co-founder of Fundstrat, issued an unusual bearish warning for Ethereum (ETH) due to the potential negative impact of a sharp decline in the South Korean stock market on the crypto market. According to Lee, such a decline could trigger additional sell-offs of ETH. “This significant drop in Korean stocks is likely affecting cryptocurrency,” – Lee wrote in his post.
He expressed serious concern about margin liquidations among South Korean brokers and noted that South Korean investors hold a significant share of crypto assets, making the cryptocurrency market vulnerable to financial contagion. “Short-term issues,” – he added, highlighting ETH. Lee made this warning at a time when the KOSPI index in South Korea plummeted more than 6% on Tuesday, October 13, amid massive sell-offs in the technology and semiconductor sectors. The stock market crash was so severe that the Korea Exchange was forced to take emergency measures to stabilize the market.
The South Korean stock market is under pressure due to growing concerns about the boom in artificial intelligence and the competitiveness of major South Korean companies in the semiconductor field. The massive sell-off in the stock market mainly affected two key companies: Samsung Electronics and SK Hynix. It is reported that Chinese chip maker ChangXin Memory Technologies (CXMT) has made significant progress in semiconductor technology, raising concerns about increasing competition from China, which could negatively impact memory prices and profit margins. Additionally, American semiconductor stocks also fell sharply; the Philadelphia Semiconductor Index lost 2.67% in the last session. The Korea Exchange activated a stabilization mechanism on the sell side around 9:48 AM local time after KOSPI 200 futures fell more than 5%. However, the intervention could not prevent broader sell-offs.
This material is prepared solely for informational purposes and does not constitute financial advice or a recommendation.
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