By Six Plus, Rising BeatZ

As quickly as skyscrapers rise, they can also come crashing down.

The South Korean stock market is always a rollercoaster ride, transforming from the "world's hottest stock market" to the scene of "the biggest stock market crash" in less than a month.

How crazy is the Korean market? The KOSPI index has experienced a total of 15 circuit breakers in its history, with 9 of them occurring this year, 4 of which took place in July alone. On July 28th and 29th, the KOSPI even triggered a Level 1 circuit breaker for two consecutive days.

When Korean netizens reached a certain level of despair, they found themselves too exhausted to resist, and instead turned their tragedies into jokes just to muster the energy to continue monitoring the market.

Let's Aim for a Three-peat Together

The so-called "three-peat" is a joke coined by Korean stock investors in the past few days. Since they have experienced two consecutive circuit breakers, why not have one more day to achieve a "hat trick."

To understand how absurd this joke is, one must first look at some statistics about circuit breakers in the Korean stock market.

In the Korean stock market, circuit breakers were originally designed as a mechanism for "historical disasters." A Level 1 circuit breaker is triggered when the index drops by 8% in a day and remains at that level for one minute, leading to a 20-minute suspension of the entire market. From the first implementation of this system on the KOSPI in 2000 until the end of 2024, over a span of 25 years, it had only occurred 6 times: during the 2000 dot-com bubble, the 2001 9/11 attacks, the 2020 COVID-19 pandemic, and the "Black Monday" caused by the unwinding of yen carry trades in 2024. Each of these events became noteworthy historical incidents.

However, as of July 29, 2026, circuit breakers have already been triggered 9 times this year. In just the month of July, there have been 4 circuit breakers (on July 7th, 13th, 28th, and 29th). Out of the historical total of 15 circuit breakers, 9 of them have occurred in the first half of 2026.

"A sudden brake that used to happen once a year has now almost become a weekly routine." This is how Korean netizens lamented on stock market forums in South Korea.

So a modified version of an investment adage inspired by Buffett began circulating among Korean stock investors: "First rule: Do not buy, absolutely do not touch the domestic Korean stock market. Second rule: No matter what, adhere to the first rule."

The domestic Korean stock market has also been likened to junk coins and the coin circle, not because stocks have actually turned into cryptocurrencies, but because people suddenly realized that the way they were holding stocks was becoming more and more like chasing a highly volatile, brakeless chip.

On Korean forums, they gave KOSPI a nickname, "KSPY," with a precise taunt: "KSPY makes SPY look like child's play." SPY is the U.S. stock ETF that tracks the S&P 500, always seen as synonymous with volatility; but compared to Korean stocks, the S&P's small fluctuations seem like child's play.

An American netizen came forward, saying that earlier this year, they also jumped into the KOSPI's uptrend, "But I had to get out. The volatility was too high, and the pressure was too much." The replies below were icy: "You obviously don't have enough Korean blood in you." "You should use leverage to buy, only then can you experience the Korean stock market to the fullest."

For readers of BeatZ, we have all witnessed this round of "high-rise, high-fall."

Just half a year ago, KOSPI was still the best-performing global index: it closed at 4214 points at the end of 2025, hitting a historic high of 9385.59 in intraday trading on June 19, 2026, with gains doubling and more. Driving this surge was the narrative of AI, storage, and semiconductors led by Samsung and SK Hynix, the main theme we have dissected repeatedly in recent months. On June 22, SK Hynix's market value exceeded Samsung's for the first time in 25 years, symbolizing the peak of this bull market.

Then, in just a few weeks, this "world's greatest" index tumbled from the peak. By July 29, the intraday low was down 44% from the June peak. July is likely to be the most brutal month in KOSPI's recorded history, with a nearly 30% decline, wiping out trillions of Korean won in market value.

A market that combines retail leverage and high concentration of heavyweight stocks plummeted from heaven to hell in a matter of weeks.

Soju, Part-time Jobs, and Crying in the Hallway

Take a look at the Korean forums and social media these days, and you can piece together a very specific portrait of Koreans.

A Korean netizen posted, "Three days ago, I drank two bottles of soju in one go. After seeing the stock prices yesterday and today, I don't even have the desire to drink anymore. I am now frantically submitting resumes on AlbaMon and Job Korea (Korea's two largest part-time job search websites), hoping to find at least three jobs."

For this netizen, the money lost in this wave is equivalent to the price of two imported cars, and the pressure is so intense that they can't sleep at night.

Someone replied below, "To be honest, I have also frantically searched for part-time jobs. I have no appetite now and don't want to interact with people."

Other netizens have also mentioned that they can't bring up the topic of stocks in public now and have to be careful even in crowded places.

On X, a post translated from Korean by Grok has been widely circulated.

The poster calls themselves the "Winner of Life," but all they wrote were ㅜㅜ (Korean symbol for crying): "Today was really serious; the company went into emergency mode. After a department head was forced to liquidate, they screamed, 'Life is over,' and cried in the company's hallway. They used up all their loans, said they're broke, and even put all their retirement savings into it. In the end, they said, I also have several accounts in the red, feeling very upset, but there are people in a worse situation than me everywhere in the company. This post has over three million views and has been shared all over the internet."

In addition, many netizens are worried about the current social atmosphere in Korea and the possibility of serious social issues. Many others have pointed out the extreme side of Korean culture.

Even more concerned about the potential for serious social issues than netizens is the South Korean government.

On July 28, on the same day as the market collapse, the South Korean government plans to establish a "National Suicide Response Office," jointly with the police and fire departments, elevating the past suicide emergency response mainly led by local governments to a national level and continuously contacting and visiting those suicide attempters who refuse psychological counseling.

South Korean Government Plans to Establish "National Suicide Prevention Office"

This mechanism itself is a more macro-level crisis intervention, not necessarily just targeting the stock market crash; but appearing at this particular point in time, it has been quickly associated with the market freefall by the public opinion. When a country's stock market needs to be mentioned in the news in the same week as a suicide prevention office, the joke is no longer funny.

Laying Wreaths at the Entrance of the Seoul National Assembly

The establishment of the "National Suicide Prevention Office" cannot be seen as an overreaction by the South Korean government. After all, in front of the National Assembly gate on Yeouido Island in Seoul, there are already more than 30 white wreaths.

Entrance of the Seoul National Assembly Filled with Wreaths

The funeral wreaths with white background and black letters are lined up along the sidewalk in front of the assembly, and passing citizens stop, read the words on them, or take pictures.

On the wreaths are inscriptions such as: "Investor Protection, Just Lip Service?" "Forced Delisting," "Samsung and SK Hynix's Leverage is a Weapon," and other remarks.

The wreaths are sent by South Korean retail investors.

What they are demanding is the removal and abolition of the "single-stock leveraged ETF" targeting Samsung Electronics and SK Hynix, this type of financial product. Koreans have given a combined name to these two companies, calling them "Samsung-SK."

The very essence of a regular ETF is diversification, typically covering ten or more stocks. However, a single-stock leveraged ETF only targets one stock, tracking its daily price movement at 2x. If Samsung rises 10% today, it rises 20%; if it falls 10%, it falls 20%.

Even more alarming is the "negative compounding effect," where as long as the underlying stock fluctuates back and forth, the net value of such products will be gradually eroded. Even if the stock stays flat, holders may still lose money.

This high-leverage gambling tool was only listed in Korea in May of this year. Following the listing, funds poured in frantically, with just in one month of July, over 70 trillion Korean won was invested in these single-stock ETFs targeting "Samsung-SK."

When the crash finally arrived, the mechanical rebalancing of these products (forced selling during a downturn) in turn magnified the index's volatility, creating a self-reinforcing downward spiral. Yields were almost halved, and retail investors lost everything. The assessment from financial regulators is that it was this that greased the wheels for the market's "abnormal volatility," turning the KOSPI into a gambling den resembling a "squid game."

Why Are South Koreans Pointing Fingers at the Government?

Most South Korean stock investors have now realized that it was precisely these high-leverage gambling instruments that led to their financial ruin.

So, the spotlight has been placed on two individuals; one is President Lee Jae-myung. The other, Presidential Policy Chief Kim Yong-hwan.

It is because they spearheaded the rapid listing of these single-stock leverage products.

To understand why retail investors are directing all their anger at the government, especially at Lee Jae-myung, one must first look back at how he got to this point.

Lee Jae-myung's association with the "KOSPI 5000" slogan runs deep. As early as his first presidential election bid in 2022, he shouted "KOSPI 5000," saying, "I don’t think reaching 5000 points is difficult, if you believe in me, you should pay more attention to the stock market." That time, he narrowly lost to former President Yoon Suk-yeol.

In opposition to former President Yoon Suk-yeol's "authoritarian rule," Lee Jae-myung once went on a 24-day hunger strike in public

And Lee Jae-myung, also known as the "Strongest Starver in South Korea," during Yoon Suk-yeol's failed coup attempt, live-streamed himself climbing over the wall into the National Assembly building, initiating a parliamentary vote to lift martial law.

With the support of the people, Lee Jae-myung climbs over the wall into the National Assembly

The photo of him climbing over the wall later became an iconic image among South Korean youth. Subsequently, Yoon Suk-yeol was impeached and removed from office, sentenced to life imprisonment for "conspiring to incite rebellion." Meanwhile, Lee Jae-myung, backed by the promise of "KOSPI 5000" and his popularity among the people, took over the Blue House in a by-election in June of last year. To demonstrate his determination, he even spent 40 million Korean won out of his pocket to buy local ETFs before the election, pledging to invest another 1 million monthly after winning.

After taking office, Lee Jae-myung's promises were quickly fulfilled. The KOSPI index actually reached 5000 points earlier this year, fulfilling the promise that had been questioned by many; it then skyrocketed to 9385. For a while, Lee Jae-myung seemed like a hero who could turn everything he touched into gold: foreign capital poured in crazily, the index was the fairest of them all globally, with gains of over 100%.

However, the issue lies in the promise to "rise to 5000," when reality turned out to be "rise to 9000 and then crash back to 5000." At the same 5000-point mark, the ascent felt like heaven, but the descent felt like hell. Retail investors went all-in with leverage at the peak, and now they are buried halfway up the mountain.

Lee Jae-myung (Center) bows with Samsung Chairman Lee Jae-yong (Right) and SK Group Chairman Chey Tae-won (Left)

This "three-person photo" also became a dark form of humor. During the bull market, they symbolized "KOSPI 5000," the AI chip giants, and the reassessment of Korean assets; after the crash, netizens turned this etiquette photo into an "emergency halt trio" apology scene.

Some spoke in defense of the government. No matter how much you hate the government, the losses caused by leverage are entirely the investors' own greed and fault. "Would anyone smile and thank the government when their assets surged daily due to leverage? This is a typical case of 'Success is my achievement, failure is someone else's fault.'"

But the more mainstream sentiment is anger.

Some denounced this as "policy chaos, arbitrary bestowal of titles, with only the common people being kept in the dark, and this is stifling us," then asked rhetorically, "The irony is, there are actually people supporting such a despicable government."

They mockingly twisted the president's name, Lee Jae-myung, into "Dae Jae-myung," which literally translates to "Great Jae-myung," with a sarcastic tone akin to "the great Comrade Jae-myung" in Chinese.

What infuriated South Korean netizens was the attitude of the South Korean government.

On July 29, Kim Yong-pan, who was accompanying Lee Jae-myung on a state visit to Brazil, held a press conference in São Paulo. Instead of offering an apology, he said: "We cannot attribute all issues to leveraged ETFs."

Kim Yong-fan, Chief of Presidential Policy Office, South Korea

Kim Yong-fan shifted the blame to "structural factors," stating that the inherent volatility of the Korean market is due to the "very dynamic nature of retail investors' participation," high derivative exposure, and that a 10-point swing at the core turns into a 20 or 30-point swing in Korea.

This explanation has been widely seen domestically as an attempt to evade responsibility.

For the opposition party, this is an opportunity of monumental proportions.

Therefore, the opposition People Power Party immediately called for Kim Yong-fan's impeachment and initiated a national investigation. They even accused the Lee In-myeong administration of propping up stock prices to stabilize them before the local elections on June 3, ignoring market skepticism and forcefully launching this high-risk product.

The Lee In-myeong government has started to contain the crisis. The financial authorities announced that starting from August 5, the basic margin for trading leverage ETFs will be raised from 10 million KRW to 30 million KRW, and they are considering restricting new purchases to professional investors, reducing leverage ratios by half, and other measures. The top leaders of finance, economics, and the central bank held an emergency "F4 meeting" overnight.

Could this be the beginning of the end for the Lee In-myeong administration? It's hard to say. After all, the Blue House has its own curse, and Korean presidents always seem to have a rough time.

However, it is evident that the Korean people are increasingly holding the government, especially Lee In-myeong himself, accountable for the massive losses.

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