From Stock Trading to Cryptocurrency Trading: Welcome Back to the Original Family

Author: Dou Wan Liao

July 13, 2026, Seoul.

The KOSPI, South Korea's composite index, plummeted 8.95% in a single day, marking the seventh circuit breaker of the year. SK Hynix, considered a "national fortune stock" by Koreans, fell sharply by 15.37%, a drop not seen in nearly twenty years. Samsung Electronics also dropped by over 10%.

More than 1.2 million leveraged accounts received margin call notifications, and brokerage systems automatically liquidated between 320,000 to 460,000 accounts. Even more heartbreaking is that 62% of those who faced liquidation were young people aged 20 to 30, with some losing their down payments for homes and others borrowing to trade stocks...

A young man in his twenties in Busan, having suffered losses due to following a stock YouTuber's recommendations, went so far as to stab that influencer.

These words, once likely used to describe the aftermath of a crash in the cryptocurrency market, are now being echoed in the markets of South Korea, the United States, and Japan following the decline of tech stocks.

The dramatic rises and falls are merely surface phenomena; the real change lies in the pricing mechanisms, where narratives overshadow valuations, leverage amplifies emotions, and social media rapidly pushes consensus to extremes.

Global stock markets, especially tech stocks, are increasingly resembling the cryptocurrency market.

Welcome Back to the Original Family

"Welcome back to the original family."

After the crash, cryptocurrency traders who turned to the stock market began writing about their losses, and this sentiment was prevalent in the comments section.

The so-called "original family" refers to cryptocurrencies. From the second half of 2025 to early 2026, a dramatic "departure from the original family" unfolded in the cryptocurrency market.

A group of KOLs and seasoned players who had been navigating the cryptocurrency market for years began to lose faith in it. Bitcoin stagnated, trading volumes dwindled, and meme coins were cut time and again, leading many to feel that "this circle has lost its excitement," prompting them to shift their attention to U.S. stocks.

This choice seemed quite reasonable.

Stocks have income, profits, financial reports, and SEC regulation. Compared to cryptocurrency projects that lack cash flow and rely entirely on consensus pricing, U.S. stocks at least resemble a more mature and safer asset.

The cryptocurrency traders did not just take away liquidity; they also brought their trading methods with them.

In the cryptocurrency market, they were accustomed to chasing new narratives, seeking high-volatility targets, using leverage, and quickly changing positions based on social media sentiment. Upon entering the stock market, this methodology changed little, with the only difference being that the trading targets shifted from tokens to AI, storage chips, and leveraged ETFs, yielding significant results repeatedly.

Storage stocks quickly became the new collective consensus.

The logic is not complicated: AI servers require more high-bandwidth memory, HBM is in short supply, storage prices are rising, and Micron, Samsung Electronics, and SK Hynix naturally become the most direct "sellers of shovels," with the saying "there will always be a shortage of storage" resonating deeply.

Many cryptocurrency KOLs transformed into commentators on U.S. stocks, discussing the storage cycle and AI capital expenditures. Doubling down on products like SK Hynix was also seen as a more "efficient" betting tool compared to ordinary stocks.

Until the market reversed in July.

Bitcoin Became a "Low Volatility Asset"

How long does it take for Bitcoin to drop by half from its peak?

Bitcoin took 268 days, while silver completed a similar decline in about 169 days.

In contrast, SanDisk fell about 55% in just 36 days, and SK Hynix dropped about 53% in only 34 days.

Both experiencing a "halving," Bitcoin took nearly nine months, while storage stocks only took a little over a month.

This is the paradox of the current market: in the past, investors worried that Bitcoin would surge or plummet within days, while stocks adjusted slowly based on earnings and valuations; now, some tech stocks are completing a full cycle of bubble bursting in a shorter time than cryptocurrencies.

Counterintuitively, compared to some tech stocks, Bitcoin is becoming relatively stable.

According to Charles Schwab, Bitcoin's historical volatility in 2025 was about 42%, with a maximum drawdown of about 32%; during the same period, Tesla's volatility was about 63%, with a maximum drawdown of 48%, and Nvidia's volatility was about 50%, with a maximum drawdown of 37%.

Bitcoin remains a high-risk asset, but some large tech stocks are more volatile.

Bitwise even predicted in its 2026 outlook that Bitcoin's overall volatility might continue to be lower than that of Nvidia.

Thus, the current situation is quite absurd: Bitcoin is increasingly resembling tech stocks, while tech stocks are becoming more like Bitcoin.

When Narrative Becomes the Valuation Anchor

There is an old saying in the cryptocurrency world: trading cryptocurrencies is about trading narratives.

In 2026, global tech stocks are turning this saying into reality.

AI is certainly not just hot air; Nvidia, Microsoft, Google, and large cloud computing companies have real revenues and are investing real money in building data centers.

However, the leap from "AI will indeed create value" to "any company associated with AI is worth buying at any price" is a long one.

During the hottest moments of the market, this gap was directly omitted by the market.

AI servers, optical modules, storage chips, data centers, power equipment, and even nuclear energy companies can see their stock prices soar as long as they can be included in the AI supply chain. Business plans are still in the works, orders have yet to materialize, but the market will price them based on the best outcomes years down the line.

The story in Korea is that "AI semiconductors relate to national fortune." As the KOSPI continues to hit new highs, more and more families are opening stock accounts for their underage children, treating popular stocks like Samsung Electronics and SK Hynix as long-term gifts.

A-shares have also seen similar concentration. In the first half of 2026, the TMT sector's market capitalization reached 41.78 trillion yuan, accounting for about 31.45% of the total A-share market capitalization; on certain trading days, the trading volume of the tech sector approached half of the entire market.

The U.S. market has long been priced around a few large tech companies. When index gains increasingly rely on a handful of companies, and funds, options, and retail investors all flock to the same stocks, what appears to be a diversified investment portfolio is actually betting on the same AI narrative.

This is quite reminiscent of the cryptocurrency market in the past; the surge of Dogecoin in 2021 was not due to technological breakthroughs but because Elon Musk tweeted about it. The surge of tech stocks in 2026 is also not because all companies are performing explosively, but because ChatGPT made everyone believe that "AI will rewrite everything."

The rapid dominance of narratives in the market is also facilitated by changes in communication methods.

In the past, stock information primarily came from financial reports, research reports, and institutional roadshows. Today, more and more investment decisions are influenced by YouTube, X, short videos, and paid communities.

Complex company research is condensed into a few phrases: Time will prove that computing power and optical modules, AI computing power will never be enough...

Social media algorithms do not reward caution; getting rich overnight is always the key to traffic: some people double their money overnight through options, some workers achieve financial freedom by heavily investing in storage stocks, and some make years' worth of salary in just a few months using leveraged ETFs.

K-lines are the best publicity, and many mothers and grandmothers are starting to invest their savings, with some even selling their homes to trade stocks, just like a few years ago when a group of students dropped out to go all-in on Web3...

The Leverage Frenzy

The most terrifying aspect of the cryptocurrency market is not the volatility, but the deadly combination of leverage and volatility, which the global stock market in 2026 is perfectly replicating.

On May 27, 2026, the Korean Exchange approved the listing of 16 double-leveraged ETFs based on individual stocks, with the underlying assets being Samsung Electronics and SK Hynix.

Retail investors went wild. From the approval until mid-July, Korean retail investors net bought 14 trillion won (approximately 640 billion yuan) worth of single-stock leveraged ETFs, while foreign investors only purchased about 2 trillion won during the same period.

These ETFs have several fatal designs.

These products readjust their positions daily. The more volatile the market, the more apparent the loss in net value. If a stock first drops by 10% and then rises by 11.1%, the stock price can return to its original point; however, the corresponding double-leveraged product would first drop by 20% and then rise by 22.2%, ultimately still losing about 2.2%.

The problems become even more severe during rapid declines.

To maintain the target leverage, these products need to passively reduce their risk exposure after a drop. Selling will further depress the underlying asset's price, and the price drop will trigger more liquidations, stop-losses, and margin pressures.

Goldman Sachs later pointed out that the "rapid deleveraging" of these products was the main reason for the KOSPI's abnormal intraday volatility, with 62% of institutional net selling coming from ETF-related liquidations.

Two months later, Korean regulators urgently halted the listing of all new individual stock leveraged ETFs, raising the minimum margin from 10 million won to 30 million won, and only cash is accepted.

But it was too late; 2.3 trillion won in forced liquidations wiped out the wealth of hundreds of thousands of families.

Even the deepest U.S. stock market is experiencing the backlash of leverage.

J.P. Morgan analysts recently pointed out that the U.S. stock market still has "deleveraging space" and will need three months to return to the levels seen before April.

The scale of leveraged ETFs in storage chip stocks relative to the underlying market capitalization is three times the average level of all stock ETFs. Even the overall leveraged stock index ETFs are at a high relative to their historical levels.

A Regression

"The stock market becoming like the cryptocurrency market" does not mean that stocks have become completely identical to cryptocurrencies.

Stocks still have companies, assets, income, and cash flow behind them, along with financial disclosures, audits, and regulations. Even when market sentiment fades, a genuinely profitable company still possesses calculable value.

The real change is at the trading level.

In the past, people bought a company's future profits; now, more and more people are trading on the popularity of a theme.

The stock market's cryptocurrency-like behavior is essentially a revolution of irrationality.

Traditional stock markets look at PE ratios and cash flow, while cryptocurrency-like stock markets focus on narratives and imagination; a volatility of 20% is considered high in traditional stock markets, while a daily volatility of 10% to 15% is the norm in cryptocurrency-like stock markets.

Traditional stock market leverage comes from margin trading, while cryptocurrency-like stock market leverage comes from ETFs, derivatives, and quantitative strategies; traditional stock market information comes from research reports and financial statements, while cryptocurrency-like stock market information comes from Twitter, YouTubers, and communities; traditional stock markets are rationally priced by institutions, while cryptocurrency-like stock markets have institutions acting like retail investors, chasing trends...

Ironically, Bitcoin is now trying to become more like stocks, through ETFs, institutionalization, and decreasing volatility, gradually being accepted by mainstream finance.

This is an absurd intersection.

Those who transitioned from the cryptocurrency market to the stock market ultimately find that they have not left their "original family"; it is a mechanism that keeps repeating: grand narratives, crowded positions, easily accessible leverage, and the belief that everyone can exit before others.

The words written by Korean retail investors on trading forums are worth remembering by everyone: I want to return to the days before trading stocks and get my money back.

But the market never refunds.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.