Global suckers barometer? Korean retail investors "change face": embracing the digital coin sector.

Author: Long Yue, Wall Street Insights

South Korean retail investors are withdrawing from Tesla on a large scale, shifting their funds to the cryptocurrency-related sector.

On September 3rd, according to Bloomberg's calculations, South Korean individual investors net sold Tesla shares worth $657 million in August, setting a record for the largest monthly capital outflow since at least the beginning of 2019.

Data shows that in the past four months, the total amount of funds withdrawn from Tesla has reached $1.8 billion. The exchange-traded fund TSLL, which provides two times leverage on Tesla, also faced a withdrawal of $554 million in the same month, marking the largest single-month outflow since the beginning of 2024.

At the same time, this capital is flowing into more volatile assets. For example, Bitmine Immersion (BMNR) attracted a net inflow of $253 million in August, as the company is seen by the market as a "proxy stock for Ethereum" due to its newly launched Ethereum treasury platform.

Narrative Fades, Momentum No Longer

The wavering confidence of South Korean retail investors in Tesla stems from the growing disappointment towards the electric vehicle manufacturer. During the COVID-19 pandemic, they were attracted to high-profile American tech companies like Tesla, but now, the situation is changing.

"Tesla has provided many inspiring narratives in the past, but now it can no longer win hearts," said 33-year-old individual investor Han Jungsu. He first bought into Tesla in 2019 but sold out earlier this year, turning his attention to stocks he believes have greater upside potential.

"It has failed to take a leading position in its own artificial intelligence narrative." This sentiment has spread among investors who believe that Tesla's stock price lacks the strong upward momentum it once had, leading them to choose to allocate their funds elsewhere.

Turning to Crypto, Chasing New Hotspots

Withdraw funds from Tesla and look for new, more dynamic speculative targets, with cryptocurrency-related stocks becoming a popular choice. Among them, Bitmine Immersion (BMNR) stands out, as the company is seen by the market as a proxy for Ethereum due to its newly launched Ethereum treasury platform.

An analysis by the research firm Vanda Research found that BMNR is not only popular in South Korea but has also garnered the highest attention among American investors. Its investor sentiment score reached as high as 98.4%, surpassing all other stocks on the list. This indicates that the preference for chasing high-volatility, high-momentum assets is somewhat common among retail investors worldwide.

Loyalty wavers, but status remains unshaken

Despite a record outflow of funds, Tesla's status among retail investors in South Korea has not completely collapsed. Data shows that South Korean retail investors still hold about $21.9 billion worth of Tesla shares, making it the most popular foreign stock, ahead of second and third places, Nvidia and Palantir.

However, the cracks in loyalty have already emerged. Data from Vanda Research also indicates that in the U.S. market, although retail investors' interest in Tesla remains high, its net buying amount is less than half that of the leader Nvidia, and retail investor sentiment has "clearly deteriorated." This further confirms that Tesla's appeal among global retail investors is facing challenges.