Svmuu News: Dovey Wan, founding partner of Primitive Ventures, posted on X that—from the “kimchi premium” seen in every crypto cycle to the current “memory stocks”—South Korea may be one of the clearest indicators of the end of a cycle among global risk assets. This is not only because South Korean retail investors are extremely fervent speculators (“degens”), but also because the market structure itself further fuels their frenzy.
South Korea launched single-stock leveraged products on May 27, at a time when the asset’s price had already skyrocketed nearly vertically. Local South Korean retail investors rushed in as the narrative hype reached its peak; by contrast, investors in Hong Kong-listed leveraged products had previously enjoyed several months of a buffer period during the rally.
When an already crowded domestic stock market, after the asset has entered a phase of reflexive surge, introduces leveraged instruments for its hottest stocks, the launch of such products in itself signals that the market has peaked.
This happens every time in the cryptocurrency cycle—South Korean domestic exchanges typically list assets only after they have already experienced parabolic surges on other global exchanges, leaving poor South Korean retail investors to serve as the final source of exit liquidity.