AI frenzy losing steam leaves bitcoin less volatile than South Korean stocks
South Korea's Kospi index has become significantly more volatile than Bitcoin due to the cooling of the AI investment frenzy. Data shows that options markets now view the stock index as twice as risky as the leading cryptocurrency.
Why it matters
This shift challenges the perception of crypto as the most volatile asset class and highlights the risks associated with AI-driven stock market bubbles.
While geopolitical tensions are pressuring bitcoin BTC $ 63,269.14 and the broader crypto market, a compelling data point has surfaced, highlighting the side effects of this year's AI frenzy.
South Korea's Kospi index, a primary beneficiary of the AI boom, has slumped nearly 25% in just four weeks. Options markets show the index is now viewed as at least twice as risky as bitcoin, a decentralized cryptocurrency frequently criticized for its extreme volatility.
Kospi’s options-based 30-day implied volatility (IV) index has surged to an annualized 81%, more than double BVIV, the bitcoin equivalent, at around 38%, data from Bloomberg and Volmex show. Implied volatility is determined by demand for options, or hedging contracts; greater demand indicates a greater perceived need for protection from price swings.
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