Bitcoin Decouples from South Korean Stocks as AI Concerns Fuel Kospi Selloff

South Korean chipmakers face another heavy sell-off as concerns over AI costs and Chinese competition grow, while Bitcoin trades well above its lowest level of the summer.

The KOSPI fell 5.5% and is almost 38% below its June peak, while Bitcoin bounced back to $87,000 from around $58,000.

Bitcoin and KOSPI show a negative 20-week correlation of -0.41.

Broadcom CEO Hock Tan's warning about speculative AI investment and CXMT's claims of memory chip success intensified pressure on global chip stocks.

South Korea's stock market suffered another sharp sell-off on Tuesday, with the KOSPI down 5.5 percent in Asian trading. The index is currently about 38% below its June all-time high, which contrasts with Bitcoin's 40% recovery.

Bitcoin fell to near $58,000 shortly after the KOSPI peaked, and has since rallied to $87,000. The weekly chart shows a 20-day rolling correlation of -0.41, indicating a moderately negative relationship between Bitcoin and the KOSPI.

This divergence suggests that Bitcoin could benefit by reducing investors' exposure to AI trading, although correlation alone does not drive capital turnover.

According to the Financial Times, the latest sell-off came after comments by Broadcom (AVGO) CEO Hawk Tan likened speculative AI investing to gambling in a casino. His comments fueled concerns about whether the industry could generate enough returns to justify massive infrastructure spending. In addition, developments by Chinese rival CXMT memory chips have added to concerns about competition and the durability of chipmakers' margins, according to a Bloomberg report.

SK Hynix and Samsung Electronics fell about 10 percent and 7 percent, respectively. The weakness also extended into U.S. premarket trading, with memory and storage chip makers Micron Technology ( MU ) and SanDisk ( SNDK ) both down about 3%.