The Korean won has plummeted to lows not seen since 2008: capital flight from AI stocks.
The South Korean won (KRW) has collapsed to its lowest level against the US dollar since the 2008 global financial crisis. Over the past two months, the KRW/USD currency pair has lost 7.5%, reaching a critical level previously seen only at the height of the 2008 crisis.
This decline is a direct consequence of massive capital outflows by foreign investors from the Korean stock market. The mechanism is simple: when global players sell off Korean stocks, they convert the proceeds back into their own currencies, creating enormous selling pressure on the KRW. The exchange rate has dropped to 0.000632 dollars per won — a low not seen since 2009, with current quotes fluctuating around 0.000638.
Stock market under pressure
The currency weakness unfolds against a backdrop of a series of sharp crashes in the KOSPI index. On June 23, the decline was 9.99% in a single day — the exchange activated a trading halt mechanism, and shares of giants SK Hynix and Samsung Electronics lost more than 11%. This was not an isolated episode: on June 26, the index collapsed again by more than 8%, marking the fifth trading halt in a month. Over 400 trillion won (about $360 billion) evaporated from the market at that time.
The key catalyst for the pressure on the KRW is the status of the currency itself. The won is classified as a "local" currency and is not part of global reserves, so sales by foreigners hit it particularly hard. An additional blow came from record margin debt, which reached 32.67 trillion won ($22.4 billion), up 25% from a year earlier.
The future trajectory will depend on the sustainability of demand for artificial intelligence chips — the sector around which the growth of the Korean market was built. As long as foreign capital outflows persist, the pressure on the won remains downward.
My analysis: The situation in the Korean market is a vivid example of how overheating in the AI sector and subsequent investor flight can trigger a full-fledged currency crisis in an export-dependent economy. For crypto investors, this is a signal: the correlation between traditional markets and digital assets intensifies during moments of panic, and the decline of the KRW could indirectly pressure Asian crypto volumes.