South Korean Retail Investors Turn to High-Risk Assets During Chuseok
South Korean retail investors utilized their Chuseok holiday week to make significant investments in American technology stocks and cryptocurrency-related assets. From October 3 to October 9, 2025, as local markets closed for the traditional harvest festival, these investors directed $1.24 billion toward foreign markets, with a particular focus on high-risk, leveraged products. Data from the Korea Securities Depository highlights a distinct trend: rather than opting for conservative investments, South Korean traders chose to engage in some of the most volatile investment opportunities available globally during this festive period.
Leveraged Bets on Tesla Dominate Investments
Leading the surge in investments was the Direxion Daily Tesla Bull 2X ETF, which attracted $151 million in net purchases. This leveraged product amplifies the daily movements of Tesla stock, allowing for increased profits when prices rise, but also resulting in more significant losses when prices decline. Following closely was Iris Energy, an Australian Bitcoin mining firm, which secured $105 million in investments. Meta Platforms garnered $100 million, while Tesla’s shares themselves brought in $96 million. Completing the top five was the T-REX 2X Long BMNR Daily Target ETF, which received $95 million, another leveraged option tied to Bitcoin mining. These selections underscore a key preference among Korean retail investors for heightened exposure rather than traditional stock investments, with four out of the five leading choices involving either leverage or cryptocurrency mining, both notorious for their extreme price volatility.
The Resilient “Ant Army” of Investors
South Korean retail investors, often referred to as the “Ant Army” due to their collective influence in the market, are known for their bold investment strategies. The rapid pace of the country’s internet connectivity, coupled with user-friendly mobile trading applications, empowers these individual traders to take on substantial risks. The spending spree during Chuseok was not an isolated incident; by March 2025, these investors had already contributed $10.2 billion to US stocks and ETFs, marking the highest quarterly inflow recorded since 2011. However, this aggressive approach has led to previous setbacks. Earlier in 2025, many investors in Korea held a significant portion of a triple-leveraged Tesla product, which plummeted by over 80% from its peak in December, while Tesla’s stock itself only fell 41% in that timeframe, illustrating how leverage can exacerbate losses.
Challenges Arising from Market Timing
The surge in holiday investments occurred at a complicated juncture. Just ahead of Chuseok, Seoul’s stock market had been reaching new heights, with the Kospi Index achieving record levels amid positive sentiment driven by US tech performance and domestic stimulus initiatives. Upon reopening after the week-long holiday, the Kospi rose to 3,610 points, surpassing the 3,600 mark for the first time. This rally was primarily fueled by foreign investors, who purchased over $700 million worth of Korean stocks in a single day. However, the overseas investments made during Chuseok encountered immediate challenges, as global markets faced setbacks due to escalating US-China trade tensions. Consequently, the Kospi opened 1.7% lower on the Monday after the holiday, reversing much of its previous gains.
South Korea’s Complicated Crypto Landscape
The substantial investment in crypto-related assets is particularly noteworthy given the recent struggles of South Korea’s domestic cryptocurrency market. From January to June 2025, the local crypto market experienced a decline of around $24 billion in value, with daily trading volumes on local exchanges dropping by 80%—from 17.1 trillion won in December 2024 to just 3.2 trillion won by June. Despite these challenges, cryptocurrency remains highly popular in South Korea, with over 16 million residents—almost one-third of the population—holding cryptocurrency accounts that collectively contain approximately $70 billion in digital assets. The country ranks as the second-largest crypto market globally, with $1 trillion in crypto transactions recorded between July 2024 and June 2025, trailing only the United States, which recorded $4.2 trillion. Political support for cryptocurrency is also growing, as President Lee Jae-myung, who took office in June 2025, advocates for the legalization of crypto ETFs and encouraging substantial institutions like the National Pension Fund to invest in digital assets.
Understanding the Continued Investment Trends
Several factors contribute to the persistent aggressive investment behavior among South Korean traders despite past setbacks. Cultural elements play a significant role, as South Korea’s competitive environment and focus on rapid wealth accumulation often lead investors toward high-risk, high-reward strategies. The tech-savvy population benefits from widespread access to mobile trading, making it easier for individuals to invest. Additionally, limited domestic investment options compel traders to seek growth opportunities abroad. The phenomenon of Fear of Missing Out (FOMO) also plays a crucial part; when certain investments gain traction on Korean trading platforms, they can attract significant buying interest within hours, creating a cycle where early investors profit and prompt others to follow suit. Furthermore, the allure of leveraged products appeals to many traders who find standard stock purchases too slow for their liking, as these products promise to multiply gains while simultaneously increasing potential losses.
Conclusion on the Investment Wave
The $1.24 billion influx of investments during Chuseok demonstrates that South Korean retail investors remain steadfast in their high-risk trading approach. Past losses from leveraged investments and a declining domestic crypto market have not diminished their appetite for risk. The success of this strategy largely hinges on market timing and conditions. Investors who made purchases during Chuseok now face immediate obstacles as global markets weaken. However, given South Korea’s history as a leading indicator for cryptocurrency and technology trends, observing where these “ants” choose to invest next could provide valuable insights into future market movements.
