A sharp decline in South Korean semiconductor stocks is creating spillover effects in cryptocurrency markets, according to BitMine Chairman Tom Lee. The de-risking in the US, South Korea, and Taiwan has pressured both traditional equities and digital assets as investors reassess risk exposure.
The Korean stock market has borne the brunt of recent selling. The KOSPI fell 17% from October 1 through October 16, then dropped 3.5% at Tuesday's open. Samsung Electronics and SK Hynix, which comprised 44% of the index in May, lost 19.74% and 28.38% respectively during that period. Forced liquidations of leveraged positions exceeded 50 billion won for four consecutive sessions through October 16.
Taiwan's market showed more resilience, with the TAIEX down 1.73% over the same period, though it declined 3.41% on October 15 following stronger-than-expected US inflation data.
Lee attributes multiple factors to the regional selloff: AI funding concerns, US-Iran military activity, midterm election uncertainties, and rising bond yields. He argues that pressures in semiconductor and memory stocks cascaded into broader Asian markets before affecting crypto holdings in those regions.
Bitcoin and Ethereum have experienced smaller declines than regional stock indices. Bitcoin traded at $81,385, down 1.21% in 24 hours, while Ethereum traded at $2,387.07, down 1.47%. Over a longer timeframe, however, both assets have retreated substantially from recent peaks. Ethereum sits approximately 52% below its August 24, 2025 high of $4,946.05, while Bitcoin is about 35% below its October 6, 2025 high of $126,080.
The Case for Buying
Lee contends that the selloff presents a buying opportunity, noting that historically, price declines during periods of resilient fundamentals have offered attractive risk-reward scenarios. His thesis rests on crypto's role in global financial infrastructure upgrades and developments in agentic AI, where software agents independently execute tasks.
He points to August 2024 as evidence of the pattern. When the KOSPI plunged 8.77% on August 5, Bitcoin fell below $50,000 for the first time since February. The following day, the KOSPI rebounded 3.3%, Bitcoin briefly topped $56,000, and Ethereum climbed above $2,500.
Competing Perspectives
However, Dan Greenhaus of Solus Alternative Asset Management raises a counterpoint: rising borrowing costs present a fundamental pressure that strong underlying technology cannot easily offset.
Lee's buying case depends on multiple conditions aligning: forced selling in Seoul slowing, US interest rates easing, and crypto fundamentals remaining intact. With borrowing costs elevated and market pressures ongoing, the sustainability of a recovery remains uncertain.
