Carnage on the Kospi: A look back at a day in hell

Tuesday October 13, 2 a.m. in Paris. The Seoul Stock Exchange opens down 3.1% and will not recover from the session. Less than an hour later, bitcoin hit $81,200, its lowest of the night. You were sleeping, the bets financed on credit jumped.

Results: nearly $771 million liquidated on the crypto market in 24 hours, after a first salvo which had already pushed bitcoin below $82,000. Then a nighttime rebound, and now a meeting at 2:30 p.m. with American inflation.

The film of a session in hell on the Kospi

The Kospi, the main index of the Seoul Stock Exchange, initially slipped. Then he gave in. Having fallen below 6,000 points, the index lost more than 7% at the worst of the day, enough to trigger a “sidecar” on the seller side. This kill switch freezes automatic orders from trading programs for five minutes. A first in almost two months.

At the close, the counter showed 6,035.35 points, or 5.46% less than the day before, according to figures from the Korea Stock Exchange relayed by the Korea JoongAng Daily. Samsung Electronics fell 7.39% to 232,000 won. SK Hynix plunged 10.09% to 1.44 million won. Foreign investors sold a net 4.51 trillion won, or $3.35 billion.

The patterns pile up. Doubts about OpenAI's revenues, the end of share buybacks by Korean manufacturers and rapid progress by China's CXMT in memory chips: investors dropped everything at once. This is the fifth session of decline in a row for an index which fell by 13.83% over the period.

From Kospi to bitcoin, contagion through margin calls

On the crypto side, the shock is coming immediately. According to Unchained, bitcoin hit around $81,200 at 0:50 UTC, just as Seoul was sinking. Over 24 hours, $771 million in positions were liquidated, that is to say forcibly closed by the platforms due to lack of sufficient guarantees. Bullish bets account for 685.6 million of this total.

The link has a name: the margin call. When a broker requires additional collateral on shares purchased on credit, the investor sells what sells quickly, and the crypto trades 24 hours a day. Korean individuals are among the largest holders of digital assets in the world. BitMine President Tom Lee wrote this on X, citing “broker margin liquidations” and near-term pain for ether.

Williams loosens the grip, Kospi breathes

Bitcoin did not wait for the Fed. As of Tuesday morning, it rose towards $83,700, $2,500 above its floor, while Seoul was still bleeding. Stock market relief came later, from New York.

On Tuesday, John Williams, president of the New York Fed, deemed a final rate hike this year "appropriate", with no further increase necessary in 2027. The markets retained the second half of the sentence and long-term borrowing rates fell. This Wednesday at 9:10 a.m. Seoul time, the Kospi gained 1.91% to 6,150.70 points, Samsung gained 3.23% and SK Hynix 2.63%. Rebound of cheap purchase, nothing more.

What remains fragile before the CPI

The New York night didn't solve anything for the fleas. Micron, American rival of SK Hynix, lost 3.62% and SK Hynix shares listed in New York 3.19%. Huh Jae-hwan, an analyst at Eugene Investment & Securities, warns that the market's view of memory chips must change for a real recovery. The barrel of American crude is holding around $94, enough to fuel fears of stubborn inflation.

The justice of the peace falls at 2:30 p.m. Paris time, with the September Consumer Price Index (CPI). The overview published by InvestingLive expects inflation to be around 3.7% year-on-year. A warmer number, and margin calls are back in action. For trader Daan Crypto Trades, the $83,000 threshold remains key.