KOSPI Crash Sparks Contagion Fears as Crypto Markets Reel

South Korea's stock market suffered its largest quarterly drop in history on Tuesday, with the KOSPI plummeting nearly 10%.

The sell-off was triggered by weakness in US tech stocks, particularly after a series of IPOs, which dragged Nasdaq futures underwater. The Korea Composite Stock Price Index (KOSPI) fell by 910.71 points to close at 8,203, marking its tenth-biggest daily drop since the index began.

Retail investors bore the brunt of the decline due to their heavy reliance on margin trading. According to analysts, regulators may have approved leveraged funds without adequate safeguards for retail investors, fueling the fire.

The KOSPI decline also had a ripple effect on cryptocurrency markets, with Bitcoin and Ethereum recording daily declines of 4% and 5.38%, respectively. Other altcoins such as Solana and Hyperliquid slid by nearly 7% and 9% in the same window.