The KOSPI Index in South Korea reaches a four-year high: foreign capital inflow and encryption concept stocks rise together, can the crypto market benefit?

The Korea Composite Stock Price Index (KOSPI) has reached a new high in over four years, driven by a significant influx of foreign investment, marking the entry of the local stock market into a bull run. This rise is not limited to traditional industries but has also spread to companies related to Crypto Assets. Ahead of President Lee Jae-myung's 100-day administration press conference, market optimism regarding Capital Market reforms continues to grow, and the stock prices of some publicly listed companies holding encryption assets have also increased.

South Korean Stock Market Strongly Rebounds: Foreign Investment and Policy Expectations as Driving Forces

Record Performance: The KOSPI index opened at 3336.60 points on September 11, once again setting a new historical high, rising 1.67% the previous day to reach 3314.53 points. This has surpassed the old record set in June 2021 and makes it one of the best-performing major stock indices globally this year, with a year-to-date increase of 38.1%.

Capital inflow: The main driving force behind this rebound comes from foreign capital. Foreign investors net bought approximately 1 billion USD, marking the largest single-day inflow since June 2023. Meanwhile, South Korean institutional investors also net bought 654 million USD. In contrast, South Korean retail investors net sold about 1.63 billion USD to lock in profits.

Hope for Reform: The market generally attributes this rise to optimistic expectations regarding President Lee Jae-myung's Capital Market reform agenda. Furthermore, the U.S. interest rate cuts have weakened the dollar, and the government's decision to maintain the capital gains tax threshold for major shareholders (5 billion KRW) rather than lowering it has also greatly boosted investor confidence.

Performance of Crypto Concept Stocks: Mixed Gains

Woori Technology Investment: This venture capital firm, which holds shares in Dunamu, the parent company of South Korea's largest Crypto Assets exchange, has seen a 5.67% rise in the KOSDAQ technology stock market, with an increase of over 50% for the year. This surge is driven by positive expectations regarding regulatory reforms for South Korean stablecoins and a wave of trademark applications for corporate digital asset businesses.

Neowiz Holdings: As a South Korean game developer with 123 bitcoins, its stock price has risen by 38% this year, showing that the market has responded positively to its layout in the Crypto Assets field.

Wemade: However, not all crypto concept stocks have performed well. As the South Korean listed company with the most Bitcoin holdings (223 coins), Wemade's share price has fallen by 19.3% this year. This indicates that individual issues within the company (even though its former CEO was acquitted in July) continue to put pressure on the stock price, overshadowing the benefits brought by its Bitcoin holdings.

Corporate Holdings: Currently, around 15 listed companies in South Korea collectively hold at least 450 bitcoins and other Crypto Assets, highlighting that digital assets are increasingly becoming part of the balance sheets of Korean companies.

Conclusion

The strong rise of the KOSPI index not only reflects the confidence in the South Korean economy but also indicates the increasing integration between traditional financial markets and Crypto Assets. Under the combined effects of expectations for policy reforms, foreign capital inflows, and growing corporate interest in digital assets, the performance of Crypto concept stocks has become an interesting observation window. As the financial and political landscape in South Korea continues to evolve, the performance of these publicly listed companies closely related to Crypto Assets is likely to continue to be a key barometer for measuring market attitudes towards digital assets.