Tom Lee, chairman of Bitmine Immersion Technologies (NYSE: $BMNR), is warning of a selloff in Ethereum (CRYPTO: $ETH) as South Korea’s stock market crash reverberates around the world.
South Korea’s benchmark KOSPI index plunged more than 6% on Oct. 13 as stocks tied to the artificial intelligence (A.I.) trade pulled back sharply.
Lee said on social media that forced stock sales among South Korean investors could see losses spread to cryptocurrencies such as Ethereum.
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He pointed to the country’s high participation in crypto and warned that brokerage margin liquidations could create additional selling pressure on ETH and other digital assets.
However, Lee stressed that the impacts on ETH are likely to be “short-term pain.”
South Korea’s stock market has been volatile all year. Investors appear to be selling off technology stocks over fears of rising competition in memory chips from Chinese competitors.
Trading on the KOSPI index was suspended several times on Oct. 13 as the market plunged amid signs of panic selling.
Lee said he is concerned about leveraged investors who could face forced sales after sharp declines in their stock holdings, as well as financial contagion around the world.
The head of Bitmine has a vested interest in Ethereum and its price. The crypto treasury firm owns nearly 5% of ETH’s circulating supply, a stake worth more than $15 billion U.S.
Ethereum is trading right around $2,500 U.S. on Oct. 13.
BMNR stock has declined 58% over the past 12 months to trade at $23.83 U.S. a share.