Welcome back to the original family home; the global stock market is becoming increasingly crypto-like.

Original author: Dòuwánle

July 13, 2026, Seoul.

South Korea's KOSPI index plummeted 8.95% in a single day, triggering its 7th circuit breaker of the year. SK Hynix, considered by South Koreans as a "national stock," saw a staggering 15.37% drop in one day, a decline not seen in nearly two decades. Samsung Electronics also fell over 10%.

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

A young man in his 20s from Busan, having suffered losses following a stock YouTuber's recommendations, directly stabbed that blogger.

These scenarios were once typically used to describe the aftermath of a major crypto crash. Now, they are playing out repeatedly in the tech-stock retreating markets of South Korea, the United States, and Japan.

The dramatic surges and drops are just the surface. What's truly changing is the pricing mechanism: narratives outweigh valuations, leverage amplifies emotions, and social media rapidly pushes consensus to extremes.

Global stock markets, especially tech stocks, are increasingly starting to resemble the crypto market.

Returning to the Prodigal Home

"Welcome back to the prodigal home."

After the crash, crypto traders who had moved to the stock market began writing about their losses, with the above comment visible everywhere in the replies.

The so-called "prodigal home" refers to cryptocurrency. From the second half of 2025 to early 2026, a dramatic "exodus from the prodigal home" unfolded in the crypto world.

A batch of KOLs and seasoned players who had navigated the crypto market for years began losing confidence in it. Bitcoin was range-bound, trading volumes were sluggish, and Meme coins were bleeding users dry repeatedly. Many felt "this space is played out" and started turning their attention to the US stock market.

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 for pricing, US stocks at least appeared to be a more mature and safer asset.

These crypto traders didn't just bring their liquidity; they brought their trading methods along with them.

In the crypto market, they were accustomed to chasing new narratives, seeking high-beta assets, using leverage, and rapidly rotating positions based on social media sentiment. Upon entering the stock market, this approach remained largely unchanged, only the trading targets shifted from tokens to AI, memory chips, and leveraged ETFs, yielding significant results repeatedly.

Memory stocks quickly became the new collective consensus.

The logic wasn't complicated: AI servers need more high-bandwidth memory (HBM), supply was falling short of demand, memory prices were rising, making Micron, Samsung Electronics, and SK Hynix the most direct "pick-and-shovel sellers." Justin Sun's saying, "There's always a shortage of memory," became deeply ingrained.

Numerous crypto KOLs transformed, starting to talk about US stocks, memory cycles, and AI capital expenditures. Products like the 2x Long SK Hynix ETF were treated as "more efficient" betting tools compared to regular stocks.

This continued until the market reversal in July.

Bitcoin Becomes the 'Low-Volatility Asset'

How long does it take for an asset to fall halfway from its peak?

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

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

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

This is the paradox of the current market cycle. In the past, investors feared Bitcoin would skyrocket or crash 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 timeframe than cryptocurrencies.

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

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% with a maximum drawdown of 48%, and Nvidia's volatility was about 50% with a maximum drawdown of 37%.

Bitcoin remains a high-risk asset, but some large-cap tech stocks are simply more volatile.

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

So the current situation is quite absurd: Bitcoin increasingly resembles a tech stock, while tech stocks increasingly resemble Bitcoin.

When Narrative Becomes the Valuation Anchor

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

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

AI is not just hot air, of course. Nvidia, Microsoft, Google, and large cloud computing companies have genuine revenues and are investing real money in building data centers.

But there's a long road between "AI will indeed create value" and "any company touching AI is worth buying at any price."

When the market was at its hottest, this road was simply bypassed.

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

The story in Korea was "AI semiconductors are intertwined with national fortunes." As the KOSPI hit new highs, an increasing number of families began 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 market capitalization of the TMT sector reached 41.78 trillion yuan, accounting for approximately 31.45% of the total A-share market value. On some trading days, the turnover of the tech sector once approached half of the entire market.

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

This bears a striking resemblance to the old crypto world. Dogecoin didn't surge in 2021 due to a technological breakthrough, but because Elon Musk tweeted about it. Tech stocks didn't surge in 2026 because all companies had explosive earnings, but because ChatGPT made everyone believe that "AI will rewrite everything."

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

In the past, stock information mainly came from earnings reports, research reports, and institutional roadshows. Today, a growing number of people base their investment decisions on YouTube, X, short-form videos, and paid communities.

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

Social media algorithms don't reward caution either; overnight riches are always the key to traffic. Someone doubled their money overnight with options, a salaryman achieved financial freedom by heavily investing in memory stocks, someone used leveraged ETFs to make several years' salary in a few months.

Price charts are the best marketing material. Countless mothers and housewives began using their savings to enter the market, some even sold their houses to speculate in stocks, much like the students who dropped out years ago to go all in on Web3...

Leverage Carnival

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

On May 27, 2026, the Korea Exchange approved the listing of 16 single-stock 2x leveraged ETFs, tied to none other than Samsung Electronics and SK Hynix.

Retail investors went wild. From approval to mid-July, Korean retail investors net purchased 14 trillion Korean Won (approximately 64 billion RMB) in single-stock leveraged ETFs. During the same period, foreign investors bought only about 2 trillion Korean Won.

These ETFs had several fatal design flaws.

Such products rebalance their positions daily. The more violent the oscillation, the more pronounced the decay in net asset value. Suppose a stock first falls 10% and then rises 11.1%. The stock price can return to its starting point. However, the corresponding 2x leveraged product would first fall 20%, then rise 22.2%, ultimately still resulting in a loss of about 2.2%.

In a rapid decline, the problem becomes much more severe.

To maintain the target leverage, the product needs to passively reduce its risk exposure after a decline. Selling further depresses the underlying asset's 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 the abnormal intraday fluctuations in the KOSPI, with 62% of institutional net selling coming from ETF-related liquidations.

Two months later, South Korean regulators urgently halted the listing of all new single-stock leveraged ETFs and significantly raised the minimum margin from 10 million Korean Won to 30 million Korean Won, accepting only cash.

But it was too late. Forced liquidations totalling 2.3 trillion Korean Won erased the wealth of hundreds of thousands of families.

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

JPMorgan analysts recently noted that the US stock market still has "room for deleveraging" and will need three months to return to pre-April levels.

The ratio of the size of memory chip stock leveraged ETFs to the market capitalization of the underlying stocks is three times the average for all stock ETFs. Even for overall leveraged stock index ETFs, this ratio is at a historical high relative to their own history.

A Degradation

"Stock market crypto-ization" doesn't mean stocks have become exactly like cryptocurrencies.

Stocks still represent companies with assets, revenue, cash flow, as well as financial disclosures, audits, and regulation. Even if market sentiment fades, a truly profitable company still possesses a calculable value.

What has truly changed is the layer of trading.

In the past, people bought a company's future profits. Now, a growing number of people are trading the hype of a theme.

Stock market crypto-ization is, in essence, a revolution of de-rationalization.

Traditional stock markets focus on P/E ratios and cash flow. A crypto-ized stock market looks at narratives and imagination. In traditional markets, 20% volatility is considered high. In a crypto-ized market, 10% to 15% daily swings in individual stocks become the norm. Leverage in traditional markets comes via margin borrowing. In crypto-ized markets, it's through ETFs, derivatives, and quant strategies. Information in traditional markets comes from research reports and earnings. In crypto-ized markets, it comes from Twitter, YouTubers, and communities. Traditional markets rely on institutional rational pricing. In crypto-ized markets, institutions become retail-like, and quants chase momentum on both the upside and downside...

More ironically, Bitcoin is now striving to be like a stock – accepted by mainstream finance through ETFs, institutionalization, and declining volatility.

This is an absurd point of convergence.

Those who moved from crypto to the stock market ultimately find they haven't left the "prodigal home." It's the same recurring mechanism: a grand story, crowded positions, easily accessible leverage, and everyone believing they can exit before everyone else.

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

But the market never issues refunds.