Welcome back to the family home. Global stock markets are becoming like the crypto world.

Original Author: Dou Wanle

Seoul, July 13, 2026.

The Korea Composite Stock Price Index (KOSPI) plunged 8.95% in a single day, triggering its 7th circuit breaker of the year. SK Hynix, considered a "national stock" by South Koreans, plummeted 15.37% in one day – a drop not seen in nearly two decades. Samsung Electronics also fell by over 10%.

Over 1.2 million leveraged accounts received margin calls, with brokerage systems automatically liquidating between 320,000 and 460,000 accounts. More strikingly, 62% of those who were liquidated were young people aged 20 to 30. Some lost their wedding fund down payments, others had taken out loans to trade stocks...

A man in his 20s from Busan, after suffering losses from following a stock YouTuber's recommendations, directly stabbed the blogger with a knife.

Such scenes used to be typical descriptions of the aftermath of a major crypto crash. Now, they are playing out repeatedly in the stock markets of South Korea, the US, and Japan as the tech stock tide recedes.

Massive rallies and crashes are just the surface. What is truly changing is the pricing mechanism: narratives overpower valuations, leverage amplifies emotions, and social media rapidly pushes consensus to extremes.

Global stock markets, especially tech stocks, are becoming increasingly like the crypto market.

Return to the Original Family

"Welcome back to the original family."

After the crash, crypto traders who had moved to the stock market started writing posts detailing their losses, with this comment popping up everywhere in the replies.

The so-called "original family" refers to cryptocurrency. From the second half of 2025 to early 2026, a grand "leaving the original family" drama played out in the crypto world.

A group of KOLs and veteran players who had spent years navigating the cryptocurrency market began to lose faith in the space. Bitcoin was trading sideways, trading volume was sluggish, and Meme coins were being churned again and again. Many felt "this scene is played out" and started shifting their focus to US stocks.

This choice seemed perfectly reasonable.

Stocks have revenue, profits, earnings reports, and SEC oversight. Compared to crypto projects lacking cash flow and relying entirely on consensus-driven pricing, US stocks at least appeared to be a more mature, safer asset.

These crypto traders didn't just take their liquidity; they brought their trading methods along too.

In the crypto market, they were used to chasing new narratives, finding high-beta assets, using leverage, and quickly rotating positions based on social media sentiment. Upon entering the stock market, this playbook remained largely unchanged – only the trading objects switched from tokens to AI, memory chips, and leveraged ETFs. They achieved significant results repeatedly.

Memory stocks quickly became the new collective consensus.

The logic wasn't complicated: AI servers require more high-bandwidth memory, HBM was in short supply, memory prices were rising. Naturally, Micron, Samsung Electronics, and SK Hynix became the most direct "pick-and-shovel sellers." Justin Sun's phrase "there will never be enough storage" became deeply ingrained.

Many crypto KOLs transformed, starting to talk about US stocks, the memory cycle, and AI capital expenditure. Products like the 2x Long SK Hynix ETF were treated as a more "efficient" betting tool than regular stocks.

Until the market reversed in July.

Bitcoin Has Become a 'Low Volatility Asset'

How long does it take to fall halfway from a peak?

It took Bitcoin 268 days. Silver took 169 days to complete a similar retracement.

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

For a "halving," Bitcoin took nearly nine months; memory stocks took just over a month.

This is the paradox of this current market cycle: In the past, investors worried about Bitcoin skyrocketing or crashing within days, while stocks adjusted slowly based on earnings and valuations. Now, some tech stocks are completing a full boom-and-bust cycle in a shorter time frame than cryptocurrencies.

Counter-intuitively, Bitcoin is becoming relatively stable compared to some tech stocks.

Charles Schwab statistics show that in 2025, Bitcoin's historical volatility was about 42%, with a maximum drawdown of about 32%. During the same period, Tesla's volatility was about 63% (max drawdown 48%), and Nvidia's volatility was about 50% (max drawdown 37%).

Bitcoin is still a high-risk asset; it's just that some large-cap tech stocks are even more volatile.

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

So the current situation is quite absurd: Bitcoin is increasingly behaving like a tech stock, while tech stocks are behaving more like Bitcoin.

When Narratives Become the Anchor for Valuation

There's an old saying in the crypto space: trading crypto is trading narratives.

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

AI is certainly not thin air. Nvidia, Microsoft, Google, and major cloud computing companies have real revenues and are investing real money in building data centers.

But from "AI will indeed create value" to "any company associated with AI is worth buying at any price," there is a long road.

During the market's peak frenzy, this road was simply bypassed by the market.

AI servers, optical modules, memory chips, data centers, power equipment, even nuclear energy companies – as long as they could be placed within the AI supply chain, their stock prices could surge rapidly. Businesses were still in the planning stage, orders hadn't materialized, but the market priced them based on the best possible outcome years down the line.

In Korea, the story was "AI semiconductors are tied to national fortune." As KOSPI hit new highs, more and more families started opening stock accounts for their minor children, gifting popular stocks like Samsung Electronics and SK Hynix as long-term presents.

A similar concentration occurred in China's A-share market. In the first half of 2026, the TMT sector's market cap reached RMB 41.78 trillion, accounting for approximately 31.45% of the A-share total market cap; on some trading days, the tech sector's turnover approached half of the entire market's.

The US market has long been priced around a few large-cap tech companies. When index gains become increasingly dependent on a handful of companies, when funds, options, and retail investors all pile into the same batch of stocks, seemingly diversified portfolios are essentially all betting on the same AI story.

This is quite reminiscent of the earlier crypto market. Dogecoin's surge in 2021 wasn't due to a technological breakthrough; it was because Elon Musk sent a tweet. The tech stock rally in 2026 wasn't because all companies had explosive earnings; it was because ChatGPT made everyone believe "AI will rewrite everything."

The ability of narratives to dominate the market so quickly is inseparable from changes in how information spreads.

In the past, stock information primarily came from earnings reports, research reports, and institutional roadshows. Today, more and more people base their investment decisions on YouTube, X (Twitter), short videos, and paid communities.

Complex company research is compressed into a few sentences: Time will prove that computing power and optical modules, AI computing power will never be enough…

Social media algorithms do not reward caution either. Getting rich overnight is always the key to traffic: someone doubled their money overnight with options, a salaried worker achieved financial freedom by heavily investing in memory stocks, someone used leveraged ETFs to earn several years' salary in a few months.

The K-line chart is the best advertising. Many mothers and housewives started entering the market with their savings, some even sold their houses to trade stocks – just like a few years ago when students dropped out to go "all in" on Web3...

The Leverage Frenzy

The scariest thing in crypto isn't volatility itself, but the deadly combination of leverage and volatility. The global stock market in 2026 is perfectly replicating this.

On May 27, 2026, the Korea Exchange approved the listing of 16 single-stock 2x leveraged ETFs, tied to Samsung Electronics and SK Hynix.

Retail investors went crazy. From approval until mid-July, Korean retail investors cumulatively net purchased KRW 14 trillion (approximately RMB 64 billion) in single-stock leveraged ETFs. Over the same period, foreign investors bought only about KRW 2 trillion.

These ETFs had several fatal design flaws.

Such products rebalance their positions daily. The more volatile the market, the more obvious the decay. If a stock drops 10% and then rises 11.1%, the stock price returns to its starting point; the corresponding 2x leveraged product, however, would first drop 20% and then rise 22.2%, ultimately still losing about 2.2%.

The problem was much worse during rapid declines.

To maintain the target leverage, the product needs to reduce risk exposure passively after a decline. Selling further depresses the underlying price, and the falling price triggers more deleveraging, stop-losses, and margin pressure.

Goldman Sachs later pointed out that the "rapid deleveraging" of these products was the main cause of abnormal intraday fluctuations in KOSPI, with 62% of institutional net selling coming from ETF-related liquidation.

Two months later, Korean regulators urgently suspended the listing of all new single-stock leveraged ETFs, significantly raising the minimum margin requirement from KRW 10 million to KRW 30 million, accepting only cash.

But it was too late. The forced liquidation amount of KRW 2.3 trillion evaporated the wealth of hundreds of thousands of families.

Even the deepest US stock market is experiencing the backlash of leverage.

JPMorgan analysts recently pointed out that US stocks still have "room for deleveraging" and need three months to return to pre-April levels.

The ratio of the size of leveraged ETFs for memory chip stocks to the market cap of the underlying stocks is three times the average for all stock ETFs. Even for the overall leveraged stock index ETF, its ratio relative to its own history remains high.

A Degradation

"Stock market becoming like crypto" does not mean stocks are now exactly the same as cryptocurrencies.

Behind stocks, there are still companies, assets, revenue, and cash flow, along with financial disclosures, audits, and regulation. Even if market sentiment fades, a truly profitable company still has a 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 the hype around a theme.

The stock market becoming like crypto is essentially a de-rationalization revolution.

Traditional stock markets look at P/E ratios and cash flow; the crypto-ized stock market looks at narratives and imagination. In traditional markets, 20% volatility is considered high; in the crypto-ized market, individual stock daily moves of 10% to 15% are becoming the norm.

Traditional stock market leverage comes via margin borrowing; the crypto-ized market uses ETFs, derivatives, and quantitative strategies. Traditional market information comes from research reports and earnings; the crypto-ized market gets its info from Twitter, YouTubers, and communities. In traditional markets, institutions price rationally; in the crypto-ized market, institutions act like retail, and quant funds chase momentum …

More ironically, Bitcoin is now striving to be like stocks, gradually being accepted by mainstream finance through ETFs, institutionalization, and declining volatility.

This is an absurd crossroads.

People who moved from crypto to stocks eventually find they haven't left the "original family" at all. It's the same recurring mechanism: grand stories, overcrowded positions, easily accessible leverage, and everyone believing they can exit before everyone else.

A sentence written by a Korean retail investor on a trading forum is worth remembering: I want to go back to the time before I started trading stocks, and just give me my money back.

But the market never offers refunds.