Goldman Sachs: South Korean retail investors are shifting funds to crypto assets, leading to a lack of buying support for the KOSPI index’s upward movement.

Goldman Sachs Global Investment Research (GIR) Korean equity analyst Chris Cha said in a September 23 report that the KOSPI index is poised for a short-term "tactical breakout," but the ongoing flow of South Korean retail liquidity into the crypto market will make the index’s future upside more dependent on foreign investors and local institutional reallocations. The report noted that Federal Reserve rate concerns have been partially priced in, and risk appetite is shifting back to the "proxy AI" theme. South Korean memory chips will also provide fundamental support: Q4 DRAM contract prices are expected to rise double-digit quarter-over-quarter, while HBM4 production ramp-up will continue to constrain supply of standard server DRAM. Samsung Electronics’ large shareholder returns, consecutive institutional buying, and foreign investors turning net buyers could all push the KOSPI to test the 7,000–7,200 resistance zone. However, the report also warned that South Korean retail investors’ ability to absorb selling pressure is weakening. After Bitcoin returned to $85,000, crypto trading in South Korea heated up rapidly. Data from DefiLlama shows that Upbit’s single-day spot trading volume was around $770 million on June 13, rising to $1.817 billion on September 22, a roughly 136% increase. Based on the combined $3.27 billion trading volume of South Korea’s five major exchanges on September 22 cited in the report, Upbit alone accounts for more than half of the total, a clear sign that local South Korean risk capital is flowing back into digital assets. Goldman Sachs believes this will make the KOSPI’s future performance more dependent on foreign and institutional buying. October will be a key window to test whether foreign investors are willing to continue increasing their positions in South Korean semiconductor and AI assets.