Bitcoin Breaks Away From South Korean Stocks as AI Fears Deepen Kospi Selloff

South Korean chip stocks suffered another steep decline as worries about AI investment returns and growing competition from China intensified, while Bitcoin remained significantly above its summer lows.

South Korea’s stock market extended its losses on Tuesday, with the KOSPI dropping 5.5% during Asian trading. The benchmark is now about 38% below its record high reached in June, marking a sharp reversal that stands in contrast to Bitcoin’s 40% rebound.

Bitcoin hit a low of around $58,000 shortly after the KOSPI reached its peak, but has since climbed as high as $87,000. On the weekly chart, the 20-day rolling correlation between Bitcoin and the KOSPI stands at -0.41, pointing to a moderately inverse relationship between the two markets.

This growing divergence raises the possibility that Bitcoin could benefit as investors scale back their exposure to AI-related stocks. However, the negative correlation by itself does not prove that capital is moving directly from equities into Bitcoin.

The latest market downturn followed remarks by Broadcom (AVGO) CEO Hock Tan, who compared speculative investments in AI to gambling at a casino, the Financial Times reported. His comments added to concerns over whether the industry will generate enough returns to justify its massive infrastructure investments. Meanwhile, progress by Chinese memory-chip manufacturer CXMT has heightened fears about increasing competition and the potential pressure on chipmakers’ profit margins, according to Bloomberg.

SK Hynix and Samsung Electronics dropped approximately 10% and 7%, respectively. The selloff also spread to U.S. premarket trading, where memory and storage chipmakers Micron Technology (MU) and SanDisk (SNDK) each declined by around 3%.