Global retail investor bellwether? Korean retail investors "change stance": abandoning Tesla and embracing digital currencies!

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South Korean retail investors are making a large-scale exit from Tesla, shifting funds towards cryptocurrency-related sectors.

On September 3rd, according to Bloomberg's calculations, South Korean individual investors made net sales of $657 million worth of Tesla shares in August, marking the largest single-month outflow since at least early 2019.

Data shows that, over the past four months, the total funds withdrawn from Tesla have reached as much as $1.8 billion. The leveraged exchange-traded fund TSLL, which offers double exposure to Tesla, also saw $554 million in outflows during the same month, the largest single-month outflow since the beginning of 2024.

Meanwhile, these funds are flowing into more volatile assets. For example, Bitmine Immersion (BMNR) attracted a net inflow of $253 million in August. The company is regarded by the market as an "Ethereum proxy stock" due to its newly launched Ethereum treasury platform.

Narrative fades, momentum lost

The shaken confidence of South Korean retail investors in Tesla stems from growing disappointment with the electric vehicle manufacturer. During the pandemic, they were drawn to high-profile American tech companies like Tesla, but now, this is changing.

"Tesla used to offer many inspiring narratives, but now it can no longer capture people's hearts," said Han Jungsu, a 33-year-old individual investor. He bought Tesla for the first time in 2019, but liquidated his position earlier this year, turning to stocks he considers to have greater upside potential.

"It failed to take the lead in its own AI narrative." This sentiment is spreading among investors, who believe that Tesla stock lacks its former strong upward momentum and are thus choosing to invest elsewhere.

Turning to crypto, chasing new hotspots

Funds withdrawn from Tesla are searching for new, more momentum-driven speculative targets, with crypto-related stocks becoming a popular choice. Among them, Bitmine Immersion (BMNR) stands out, as the company is seen as an Ethereum proxy due to its newly launched Ethereum treasury platform.

An analysis by research firm Vanda Research found that BMNR is not only popular in Korea, but also receives top attention from U.S. investors. Its investor sentiment score reached 98.4%, surpassing all other stocks on the list. This suggests that the preference for highly volatile and high-momentum assets is a common trait among global retail investors.

Loyalty shaken, but status remains

Despite the record capital outflows, Tesla's status in the minds of South Korean retail investors has not completely collapsed. Data shows that Korean retail investors still hold about $21.9 billion in Tesla stock, making it remain the most popular overseas stock, ahead of second and third place Nvidia and Palantir.

However, cracks in loyalty are showing. Vanda Research's data also points out that, in the U.S. market, although retail interest in Tesla remains high, its net buys are less than half that of leader Nvidia, and retail sentiment has "significantly worsened." This further confirms that Tesla's attractiveness among global retail investors is facing challenges.

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