Tom Lee, co-founder of BitMine, warned on October 13 that the sell-off in the South Korean stock market could negatively impact cryptocurrency markets. According to him, the decline in stocks could lead to margin liquidations, creating pressure on investors holding digital assets.
The KOSPI fell by 5%, and total losses in the South Korean stock market reached approximately $150 billion. This index dropped by 4.5% in just a few minutes, leading to significant losses for companies like Samsung and SK Hynix, which make up about half of the index. As a result, according to The Kobeissi Letter, the market lost over 6% in one day, and the index fell more than 15% over five days. Amid these events, Nasdaq 100 futures also fell by 1% during overnight trading, indicating that the sell-off affected not only South Korea.
Lee emphasized that in the event of further losses in the stock market, investors suffering losses may begin to sell off other assets to meet margin calls. This could lead to additional declines in cryptocurrency prices, even if there are no specific reasons for sell-offs in digital assets. According to CryptoPotato, Bitcoin recently fell to $81,000, and positions worth $810 million were liquidated in 24 hours, affecting about 173,611 traders. Data shows that approximately 85% of liquidated positions were long, indicating a high degree of risk for those betting on price increases. Meanwhile, Ether rose above $2,500 again but is still 6% below levels observed a week ago. Lee also pointed to short-term risks for cryptocurrency markets, stating: "Short-term suffering."
This material is prepared solely for informational purposes and does not constitute financial advice or a recommendation.
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