Bitcoin diverges from South Korean stocks as AI concerns deepen the Kospi selloff
Bitcoin has shown a negative correlation with the KOSPI index as investors pull back from AI-related stocks following critical comments from Broadcom's CEO. The divergence suggests a potential shift in capital as market participants reassess the profitability of heavy AI infrastructure spending.
Why it matters
The decoupling of cryptocurrency from traditional tech stocks indicates a changing investor sentiment toward AI-driven market growth and potential volatility in the semiconductor sector.
Bitcoin bottomed near $58,000 shortly after the KOSPI peaked and has since rebounded as high as $87,000. The weekly chart shows a 20 day-period rolling correlation of -0.41, indicating a moderately negative relationship between bitcoin and the KOSPI.
That divergence suggests that bitcoin could benefit as investors reduce exposure to the AI trade, although correlation alone does not establish capital rotation.
The latest selloff followed comments from Broadcom (AVGO) CEO Hock Tan likening speculative AI investing to gambling in a casino, according to the Financial Times . His remarks intensified concerns about whether the industry can generate returns sufficient to justify enormous infrastructure spending. In addition, advances by Chinese memory-chip rival CXMT added to fears about competition and the durability of chipmakers’ margins, according to Bloomberg .
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