🔥 320k retail investors in South Korea forced to close positions: mirrored risk from on-chain leverage

Last week, South Korea’s stock market saw forced liquidation totaling more than 324 billion won, with 320k to 360k retail-investor leveraged accounts forcibly liquidated by brokers—some people even sold out and still owed the broker money. On-chain leverage is now replicating the same structural risks.
In the crypto market, SK Hynix contract average daily trading volume is $8.8 billion, already equivalent to 30% of the combined stock trading value in both South Korea and the U.S. The liquidation mechanism of on-chain leverage is as ruthless as in traditional markets: as prices fall, long positions are forcibly liquidated, and the additional selling pressure further pushes prices down, forming a death spiral. Goldman Sachs said the cascade-style liquidation of Korea’s 2x-leveraged single-stock ETF is precisely the trigger for the recent tech stock selloff.
South Korea’s regulators met this week to discuss risks from leveraged ETFs, but on-chain leverage lacks a circuit breaker. When the funding rate spikes to 907%, long-short games can only become more extreme. SK Hynix’s V-shaped reversal during trading is behind it: five “big whales” concentratedly opened $7.6 million worth of positions—this whale-dominated rebound is often something retail investors can’t catch.
Tonight, U.S. CPI data will be released, and the bond market has already priced in a rate hike in July. If macro liquidity tightens, the on-chain leverage liquidation risk could spread from South Korea to the entire crypto market. Bitcoin ETF saw daily outflows of $425 million, as funds are withdrawing.
On-chain leverage turns traditional stocks into a second battleground in the crypto market, but the mirrored leverage risk won’t disappear. When retail investors are liquidated, whales are buying the dip—this market has never been fair.
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