South Korea's stock exchange halted trading for 20 minutes on Thursday after the benchmark KOSPI index plunged more than 8% in a single session. The drawdown from the index's June peak has now surpassed 40%, wiping out more than $2 trillion in market capitalization.

KOSPI, which domestic investors follow the way US investors follow the S&P 500, has slid from sixth to 10th place among the world's national stock markets during the rout.

For scale, the loss tops South Korea's entire annual economic output of roughly $1.9 trillion in 2025, and it exceeds the total value of all Bitcoin ($BTC) in existence, estimated at about $1.6 trillion. It is also larger than the assets of South Korea's National Pension Service, the world's third-largest retirement fund, which holds approximately $1.3 trillion in savings that have shrunk alongside the stock market.

Black Thursday by the Numbers

KOSPI closed Thursday's session at 5,554, down 7.6% on the day and extending its losing streak to seven consecutive days. Intraday, the index fell as much as .3%, enough to trigger its 10th circuit breaker of the year — an automatic, temporary trading halt imposed when an index breaches preset loss thresholds, designed to give markets a cooling-off period during extreme swings. South Korean media dubbed the session "Black Thursday."

With the drawdown now exceeding 40%, the crisis is approaching the median decline of 43.7% recorded across South Korea's previous major market crises, including Black Monday in 1987, the Asian financial crisis of 1997, the dot-com bust of 2000, and the Global Financial Crisis of 2008.

AI Chip Giants Drive the Decline

Samsung Electronics and SK Hynix, the country's two AI chip companies, together account for roughly half of the KOSPI's total market capitalization. Due to their disproportionate underperformance in recent months, the two companies alone are responsible for 70% of the index's drawdown since its June peak.

July was the KOSPI's worst month since the 2008 Global Financial Crisis, and October is already approaching the entirety of July's loss, with the potential to finish even worse.

South Korea's stock market is officially more volatile than Bitcoin ($BTC). Retail investors have amplified the swings through leveraged single-stock ETFs — funds that use derivatives to multiply the daily moves of individual shares, magnifying losses as readily as gains — products whose introduction the finance minister has apologized for. Goldman Sachs compared this month's sell-off to the March 2020 COVID-19 crash and the August 2011 selloff that followed the US credit rating downgrade — the only two episodes in the past 20 years of KOSPI trading in which selling was this severe and no rebound day followed.

South Korea's stock market entered the world's top 10 in January by overtaking Germany at $3.25 trillion. By June, it had climbed above $5 trillion to sixth place. It now ranks 10th.

The country's Financial Services Commission chairman convened an emergency meeting on Thursday, instructing financial services firms to "maintain vigilance" and to "actively respond to ensure financial market stability and investor protection."