Bloomberg Reports: South Korean Retail Investors Shift from U.S. Tech Stocks to High-Risk, High-Reward Crypto Reserve Companies
According to a report by Bloomberg, South Korean retail funds are transitioning from U.S. technology stocks to high-risk but high-reward crypto reserve company shares. Among these, the leading Ethereum reserve company BitMine raised over $259 million in July, becoming the most popular overseas security in the local market, revealing the driving force behind the recent rise of BMNR and ETH.
South Korean Funds Shift from U.S. Tech Stock Frenzy to Crypto Reserve Companies
According to data from the Korea International Financial Center (KCIF) cited by the Korean Central News Agency, in January this year, cryptocurrency-related stocks accounted for only 8.5% of the top 50 net buying targets for South Korean investors, but this surged to 36.5% in June and slightly retreated to 31.5% in July.
Meanwhile, the appeal of large U.S. tech stocks has rapidly declined, with South Korean investors net buying only $260 million in large tech companies in July, a decrease of more than 80% compared to the monthly average of $1.68 billion from January to April.
KCIF analysis indicates that this shift is due to the rapid acceptance of stablecoins in the global financial market, particularly following the passage of the GENIUS Act, which has simultaneously enhanced the legitimacy and attractiveness of crypto-related investments.
BitMine Raises $259 Million, Becoming the Biggest Winner
In this wave of fund shifting, the biggest beneficiary is BitMine (BMNR). According to data from the Korean Securities Depository (KSD) cited by Bloomberg, South Korean retail investors have invested $259 million into BitMine since July, making it the most sought-after overseas stock among South Korean investors for the month.
BitMine positions itself as the “MicroStrategy” of the Ethereum realm, and today it officially became the first entity in history to hold over one million ETH, currently possessing 1,150,263 ETH, valued at nearly $5 billion. Benefiting from the recent rise of ETH, BMNR’s stock price also surged nearly 80% in a week, reaching a peak of $70 yesterday, demonstrating strong investor enthusiasm.
Optimism vs. Skepticism: Divergent Views on ETH Reserve Companies
Although Ethereum co-founder Vitalik Buterin holds a positive attitude towards publicly listed companies buying ETH, he recently cautioned that if crypto reserve companies rely too heavily on leveraged financing, they might lay the groundwork for future price bombs for ETH. However, he remains confident in the discipline of ETH investors, believing that market players are mature enough not to allow such disasters to unfold easily.
On the other hand, Bitcoin maximalist and JAN3 CEO Samson Mow argues that the recent craze surrounding ETH reserve companies and the rising coin price are merely short-term speculation by early holders seeking to exchange for more BTC. Once the price reaches their ideal range, they will also sell off ETH and return funds to Bitcoin.
The Next Step for the Crypto Reserve Craze: Both Opportunity and Risk
The frenzied investment by South Korean investors in crypto stocks like BitMine reflects a market seeking new avenues for higher returns beyond traditional growth stocks, highlighting local support and admiration for Korean ETH bull Tom Lee. However, the volatility of crypto assets and the financing risks of reserve companies also sow the seeds of uncertainty regarding a potential cooling off of this trend and possible price corrections.
(Benchmark Analysts: The “Slow Money” Strategy of Semler Scientific is the Long-Term Plan for Reserve Companies)
Risk Warning
Investing in cryptocurrencies carries a high level of risk, and prices may fluctuate wildly, potentially resulting in the loss of your entire principal. Please assess risks cautiously.