Welcome to the new cryptocurrency world: this time, the place for losing money is called the stock market

Written by: Dou Wan Liao

July 13, 2026, Seoul.

The KOSPI index in South Korea plummeted 8.95% in a single day, marking the seventh circuit breaker of the year. SK Hynix, seen as a "national fortune stock" by Koreans, fell sharply by 15.37%, a decline not seen in nearly twenty years. Samsung Electronics also dropped by more than 10%.

Over 1.2 million leveraged accounts received margin call notifications, and brokerage systems automatically liquidated between 320,000 to 460,000 accounts. Even more heartbreaking is that among those who faced liquidation, 62% were young people aged 20 to 30, with some losing their down payments for homes and others borrowing to invest in stocks…

A young man in his twenties in Busan, having lost money based on recommendations from a stock YouTuber, directly attacked that blogger with a knife.

These words, in the past, would likely have been used to describe scenes after a major crash in the cryptocurrency market; now, they are being repeated in the markets of South Korea, the United States, and Japan after the tech stock downturn.

The large ups and downs are just the surface; the real change is in the pricing mechanism, where narrative overshadows valuation, leverage amplifies emotions, and social media rapidly pushes consensus to extremes.

Global stock markets, especially tech stocks, are becoming increasingly similar to the cryptocurrency market.

Returning to the Origin Family

"Welcome back to the origin family."

After the crash, cryptocurrency traders who turned to the stock market began writing about their losses, and the above message was commonly seen in the comments section.

The so-called "origin family" refers to cryptocurrencies. From the second half of 2025 to early 2026, a dramatic "departure from the origin family" unfolded in the cryptocurrency market.

A group of KOLs and seasoned players who had been navigating the cryptocurrency market for years began to lose confidence in it. Bitcoin stagnated, trading volumes dwindled, and meme coins were cut down one after another. Many felt "this circle has lost its excitement" and began to shift their attention to U.S. stocks.

This choice seemed very reasonable.

Stocks have income, profits, financial reports, and SEC regulation. Compared to cryptocurrency projects that lack cash flow and rely entirely on consensus pricing, U.S. stocks at least resemble a more mature and safer asset.

What cryptocurrency traders took away was not just liquidity; they also brought their trading methods with them.

In the crypto market, they were used to chasing new narratives, seeking high-volatility targets, using leverage, and quickly changing positions based on social media sentiment. After entering the stock market, this method changed little, only the trading targets shifted from tokens to AI, storage chips, and leveraged ETFs, repeatedly achieving significant results.

Storage stocks quickly became the new collective consensus.

The logic is not complicated: AI servers require more high-bandwidth memory, HBM is in short supply, storage prices are rising, and Micron, Samsung Electronics, and SK Hynix naturally became the most direct "sellers." Sun Ge's phrase "always lacking storage" resonated deeply.
Many crypto KOLs transformed, starting to discuss U.S. stocks, the storage cycle, and AI capital expenditures. Products that double the investment in SK Hynix and others were also seen as "more efficient" betting tools than ordinary stocks.

Until the market reversed in July.

Bitcoin Became a "Low-Volatility Asset"

How long does it take to drop by half from the peak?

Bitcoin took 268 days, while silver completed a similar decline in 169 days.

In contrast, SanDisk dropped about 55% in just 36 days, and SK Hynix fell about 53% in only 34 days.

Both experienced a "halving," but Bitcoin took nearly nine months, while storage stocks only took a little over a month.

This is precisely the irony of the current market: in the past, investors worried that Bitcoin would surge or plummet within days, while stocks adjusted slowly based on earnings and valuations; now, some tech stocks are completing a full cycle of bubble bursting in a shorter time than cryptocurrencies.

It is quite counterintuitive; compared to some tech stocks, Bitcoin is becoming relatively stable.

According to Charles Schwab, Bitcoin's historical volatility in 2025 was about 42%, with a maximum drawdown of about 32%; during the same period, Tesla's volatility was about 63%, with a maximum drawdown of 48%, and Nvidia's volatility was about 50%, with a maximum drawdown of 37%.

Bitcoin remains a high-risk asset; it’s just that some large tech stocks are more volatile.

Bitwise even predicted in its 2026 outlook that Bitcoin's overall volatility might continue to be lower than Nvidia's.

So the current situation is quite absurd: Bitcoin is becoming more like tech stocks, while tech stocks are becoming more like Bitcoin.

When Narrative Becomes the Valuation Anchor

There is an old saying in the cryptocurrency world: trading cryptocurrencies is trading narratives.

In 2026, global tech stocks are turning this saying into reality.

AI is certainly not just hype; Nvidia, Microsoft, Google, and large cloud computing companies have real revenues and are investing real money in building data centers.

However, there is a long gap between "AI will indeed create value" and "any company associated with AI is worth buying at any price."

During the hottest market moments, this gap was directly overlooked by the market.

AI servers, optical modules, storage chips, data centers, power equipment, and even nuclear energy companies can see their stock prices rise rapidly as long as they can be included in the AI industry chain. The business is still in planning, orders have not yet materialized, but the market will price it based on the best results years down the line.

The story in Korea is "AI semiconductors relate to national fortune." As the KOSPI continues to reach new highs, more and more families are opening stock accounts for their underage children, treating popular stocks like Samsung Electronics and SK Hynix as long-term gifts.

A-shares have also seen similar concentration. In the first half of 2026, the TMT sector's market capitalization reached 41.78 trillion yuan, accounting for about 31.45% of the total A-share market capitalization; on certain trading days, the tech sector's trading volume approached half of the entire market.

The U.S. market has long been priced around a few large tech companies. When the index's gains increasingly depend on a few companies, and when funds, options, and retail investors all rush into the same batch of stocks, what appears to be a diversified portfolio is actually betting on the same AI narrative.

This is quite similar to the cryptocurrency market in the past; the surge of Dogecoin in 2021 was not due to technological breakthroughs but because Musk tweeted. The surge in tech stocks in 2026 is also not because all companies are experiencing explosive performance, but because ChatGPT made everyone believe "AI will rewrite everything."

The rapid dominance of narratives in the market is also inseparable from changes in communication methods.

In the past, stock information mainly came from financial reports, research reports, and institutional roadshows. Today, more and more people's investment decisions come from YouTube, X, short videos, and paid communities.

Complex company research has been condensed into a few sentences: Time will prove that computing power and optical modules, AI computing power will always be insufficient…

Social media algorithms do not reward caution; getting rich overnight is always the key to traffic: some people double their money overnight through options, some workers achieve financial freedom by heavily investing in storage stocks, and some make years' worth of salary in a few months using leveraged ETFs.

Candlestick charts are the best promotion, with many mothers and older women starting to invest their savings, and some even selling their homes to trade stocks, just like a few years ago when a group of students dropped out to go all in on Web3…

Leveraged Frenzy

The most terrifying aspect of the cryptocurrency market is not volatility but the deadly combination of leverage and volatility, which the global stock market in 2026 is perfectly replicating.

On May 27, 2026, the Korean Exchange approved the listing of 16 leveraged ETFs linked to individual stocks, specifically Samsung Electronics and SK Hynix.

Retail investors went wild. From the approval until mid-July, Korean retail investors cumulatively net bought 14 trillion won (about 64 billion yuan) of single-stock leveraged ETFs, while foreign investors only bought about 2 trillion won during the same period.

These ETFs have several fatal designs.

These products readjust their positions daily. The more volatile the market, the more apparent the net value loss. Suppose a stock first drops by 10% and then rises by 11.1%; the stock price can return to its original point; however, the corresponding 2x leveraged product would first drop by 20% and then rise by 22.2%, ultimately still losing about 2.2%.

The problem becomes even more severe during rapid declines.

To maintain the target leverage, the product needs to passively reduce risk exposure after a drop. Selling will further depress the underlying price, and price declines will trigger more liquidations, stop-losses, and margin pressures.

Goldman Sachs later pointed out that the "rapid deleveraging" of these products was the main reason for the KOSPI's abnormal intraday volatility, with 62% of institutional net selling coming from ETF-related liquidations.

Two months later, Korean regulators urgently halted the listing of all new individual stock leveraged ETFs, raising the minimum margin from 10 million won to 30 million won, and only accepting cash.

But it was too late; 23 trillion won in forced liquidations led to the evaporation of wealth for hundreds of thousands of families.

Even the deepest U.S. stock market is experiencing the backlash of leverage.

J.P. Morgan analysts recently pointed out that the U.S. stock market still has "deleveraging space," which will take three months to return to pre-April levels.

The scale of leveraged ETFs for storage chip stocks relative to their underlying market capitalization is three times the average level of all stock ETFs. Even the overall leveraged stock index ETFs are at a high ratio compared to their historical levels.

A Regression

"Stock market becoming like the cryptocurrency market" does not mean that stocks are now completely the same as cryptocurrencies.

Behind stocks, there are still companies, assets, income, and cash flow, as well as financial disclosures, audits, and regulations. Even when market sentiment wanes, a genuinely profitable company still possesses calculable value.

What has truly changed is the trading layer.

In the past, people bought a company's future profits; now, more and more people are trading on the popularity of a theme.

The stock market becoming like the cryptocurrency market is essentially a revolution of de-rationalization.

Traditional stock markets look at PE ratios and cash flow, while cryptocurrency-like stock markets look at narratives and imagination; a volatility of 20% is considered high in traditional stock markets, while a daily volatility of 10% to 15% for individual stocks is the norm in cryptocurrency-like stock markets.

Traditional stock market leverage comes from margin trading, while cryptocurrency-like stock markets use ETFs, derivatives, and quantitative strategies; traditional stock market information comes from research reports and financial statements, while cryptocurrency-like stock market information comes from Twitter, YouTubers, and communities; traditional stock markets have rational pricing by institutions, while cryptocurrency-like stock markets have institutional retailization, with quant strategies chasing trends…

Even more absurdly, Bitcoin is now trying to become more like stocks, through ETFs, institutionalization, and decreasing volatility, gradually being accepted by mainstream finance.

This is an absurd intersection.

Those who transitioned from the cryptocurrency market to the stock market ultimately found that they had not left their "origin family"; it is a mechanism that keeps repeating: grand stories, crowded positions, easily obtained leverage, and everyone believing they can exit before others.

The words written by Korean retail investors on trading forums are worth remembering by all: I want to return to the days before trading stocks and have my money back.

But the market never issues refunds.