Goldman Sachs: South Korean retail funds flow into crypto, leading to a lack of buying support for the upward movement of the KOSPI index.

BlockBeats news, September 28: Chris Cha, Korea equity analyst at Goldman Sachs Global Investment Research (GIR), said in a September 23 report that KOSPI is positioned for a short-term "tactical breakout," but the continued flow of Korean retail liquidity into crypto markets will make the index's subsequent upside more dependent on foreign investors and local institutions reallocating back into equities.

Goldman Sachs said in the report that Fed rate concerns have been partly priced in by the market, and risk appetite is rotating back toward the "agentic AI" theme. Korean memory chips will also provide fundamental support, with Q4 DRAM contract prices expected to rise double digits quarter over quarter, while HBM4 capacity ramp-up will continue to constrain standard server DRAM supply. Samsung Electronics' large shareholder returns, consecutive institutional buying, and foreign investors turning net buyers could all help drive KOSPI toward the 7,000 to 7,200 resistance zone.

But the report also warned that the absorption capacity of Korean domestic retail investors is weakening. After Bitcoin returned to $85,000, Korean crypto trading rapidly heated up.

DefiLlama data shows that Upbit's single-day spot trading volume was about $770 million on June 13 and rose to $1.817 billion on September 22, an increase of about 136%. Based on the report's cited combined trading volume of $3.27 billion across Korea's five major exchanges on September 22, Upbit alone accounted for more than half, enough to reflect that Korean domestic risk capital is flowing back into digital assets.

Goldman Sachs believes this will make KOSPI's subsequent performance more dependent on foreign and institutional buying. October will be a key window to test whether foreign investors are willing to continue increasing exposure to Korean semiconductor and AI assets.