Kevin Ain't Talking

Despite the markets enjoying some favourable inflation data last week, the resumption of hostilities in the Middle East means oil is starting to creep back up and rate hikes are once again being discussed. Meanwhile, Fed Chair Kevin Warsh is staying true to his policy of not offering forward guidance and giving markets nothing much to go on.

Over on the other side of the world, South Korea’s stock market has a distinctly crypto-esque vibe to it, with retail traders getting liquidated by some wild swings in the KOSPI, which has enjoyed a stellar year, despite recent plunges. We look at what’s driving such rampant speculation in South Korea and why the issues there are a more juiced-up version of what’s playing out elsewhere.

🌍 WEF Off 🌍

Given that the World Economic Forum (WEF) is one of those organisations that nobody voted for, yet it still tries to govern our daily lives, it’s hard not to feel rather gleeful when news of internal strife there leaks out. And, boy oh boy, is there some bad blood washing through the corridors at WEF HQ.

Two of the organisation’s biggest hitters - founder Klaus Schwab and CEO Børge Brende - have left within a year under various allegations including - yep, you guessed it, links to Jeffrey Epstein in Brende’s case. But they’re not going quietly and, along with deep concerns over the direction the WEF is heading in, it looks like rough waters still lie ahead.

In today’s video, we break down what’s been going on inside everyone’s favourite unaccountable international organisation, look at why Schwab’s and Brende’s replacements are controversial in their own right, and explain why, even though we might be enjoying the spectacle, the WEF’s internal divisions could have negative consequences for us all.

You can watch that video here.

📈 Crypto Market Forecast 📈

The week delivered two major data points that pulled in opposite directions, with the market still trying to reconcile them. June CPI came in dramatically softer than expected: -0.4% month-on-month against a consensus of -0.1%, bringing the annual rate down to 3.5%. That is the lowest CPI print since 2020, driven almost entirely by the post-ceasefire collapse in gasoline prices. Bitcoin jumped on the number, briefly reclaiming $64,000. Then oil started climbing again.

Brent crude has risen back to around $86 a barrel as the US-Iran conflict shows no sign of resolution. This is the dynamic that makes the June CPI print a temporary reprieve rather than a structural shift. The deflation that Warsh was hoping to see was always going to be oil-driven and therefore reversible. Renewed Iran tensions pushed Brent up nearly 4% in a single session this week, reopening the channel from gasoline prices to inflation expectations to Fed policy. The July and August CPI prints will look significantly worse than June’s did.

Warsh testified before Congress on Tuesday and Wednesday. True to his stated philosophy, he declined to signal where rates are heading. His message was simple: the Fed's job is to get inflation to 2%, and he will do what the data requires. Markets initially read the soft CPI as removing the hike threat, which gave Bitcoin some room to breathe. But the oil spike has already partially reversed that relief. The net effect of the week is that the rate path remains genuinely uncertain, and Warsh's deliberate ambiguity means it will stay that way until each data release forces a reaction.

The Clarity Act bill text was released on Thursday after a meeting between Republican senators and President Trump, with the goal of forcing a Senate floor vote before the August recess. The problem is, Democrats aren’t supporting it. The core dispute is about whether the bill does enough to constrain Trump's personal financial exposure to the industry. This is the tension that has been building since before the bill passed the House 294-134 a year ago. It now needs 60 Senate votes but without meaningful Democrat support, it won’t get there. The Clarity Act may still pass - but time is running out for it to pass anytime soon.

Meanwhile, at the time of writing, BTC is still below the $65,000 level that most analysts are watching as the structural reversal confirmation. ETF flows have improved from June's record outflows but have not turned decisively positive. The on-chain bottom signals that fired over the past month - realised P&L ratio at a 43-month low, more than 50% of supply underwater, long-term holders accumulating - are necessary but not sufficient conditions for a sustained recovery. The price confirmation has not yet arrived.

🏹 The Gambling Generation 🏹

It's been a brutal week for South Korean retail investors.

On 13th July, the KOSPI fell 8.95% in a single session, closing at 6,806.93 and triggering the seventh circuit breaker of 2026. For context, that's more than half of all the circuit breakers in the Korean Exchange's entire history, all in one year. The benchmark index was dragged lower due to a sell-off in the country's two largest chipmakers, with SK Hynix falling 15.37% (its largest one-day drop on record) and Samsung Electronics falling 10.7%.

Some reports suggest more than 1.2 million leveraged retail accounts triggered margin calls, and somewhere between 320,000 and 360,000 of them were fully liquidated by their brokers. Assuming that’s true, that's about 1 in every 30 Korean adults getting a margin call in the same week.

That said, if you zoom out, you’d realise the KOSPI is still up roughly 62% year to date. It also sits just 27% below the all-time high of 9,385.59 it set on 19th June. After nearly doubling its value in seven months, it shouldn’t be unusual to see the index correct a little bit.

In other words, while it was a sharp move, it isn’t out of context. This makes the reported liquidation numbers the bigger story here. If you ask us, this is a result of the excessive risk-taking behaviour observed among Korean retail investors, especially the young generation.

One report states that the most affected in the liquidation crisis were retail investors in their 20s and 30s, accounting for approximately 62% of all bankrupt or forced liquidation accounts. It also reveals that a large chunk of this cohort had a high proportion of investments in high-risk leveraged products.

The worst part is that a significant chunk of the capital for these investments came from debt. Evidence of the popularity for this style of investing can be seen in the two slang words Korean retail traders use: ‘Yeongkkeul’ and ‘Bittoo’. Yeongkkeul roughly translates to "pulling one's soul together." It describes people who stretch their finances to the absolute limit by borrowing every possible penny to buy homes or invest. Bittoo meanwhile combines two words: ‘Bit’ which translates to debt; and ‘too’ which translates to investment.

In fact, another report states that South Korea's five major commercial banks have already exhausted over 85% of their annual household loan growth limits in the first half of the year due to persistent demand for home mortgages. These loans are reportedly being used to fund stock market purchases. Many now expect a severe ‘loan cliff’ in H2 2026 as banks are forced to restrict new loans in order to prioritise repayments.

The situation is so bad that Korea's Financial Services Commission has responded by announcing an Economic Crisis Family Suicide Prevention Plan. It includes a national debt-counselling hotline launching in October and a big-data model to flag at-risk households before they get there. The regulator has also temporarily halted new single stock leveraged ETFs and raised the minimum deposit requirement for leveraged ETFs in general. It’s become clear to the state that leverage has become a household solvency issue.

This brings us to the question - what possesses a generation to do this to itself?

Well, if you ask baby boomers, they’d tell you the younger generation is just too lazy to make money through “real work.” On the other hand, if you took a minute to look at some statistics, you’d see the real answer is a mindset shift driven by inflation outpacing wage growth.

According to the FINRA and CFA Institute's Gen Z and Investing survey, 62% of under-35s believe taking big risks is required to get ahead. Interestingly, the key driver behind this trend isn’t greed but anxiety. Both Gen Z and millennials have become the most financially anxious generations in recent history. According to Deloitte's 2025 Gen Z and Millennial Survey, more than half of Gen Z and millennials survey takers say they live paycheque to paycheque, with more than 80% citing their long-term financial future as a primary source of stress.

A 2019 academic paper also makes the case that class position in developed economies is now set by asset ownership rather than wages. This is a direct consequence of living through a ‘K-shaped’ economy – where different parts of the economy move in opposite directions at the same time following a recession or downturn.

While those on the upper arm of the K experience an increase in wealth due to rising asset values or incomes, those on the lower arm face increasing financial strain due to declining purchasing power along with stagnating or decreasing wages.

The post-2008 and post-COVID periods have been textbook K-shaped environments. Central bank policy inflated asset prices dramatically, which rewarded existing owners and punished aspiring ones. Streamlined productivity from recent advancements in AI has also led to fewer jobs on the market. In effect, the inequality between asset owners (primarily baby boomers) and non-asset owners (primarily Gen Z and millennials) has progressed rapidly.

This has resulted in younger generations increasingly resorting to high-risk leveraged bets as a way to get ahead of the curve. Moreover, this isn’t just a South Korea problem. In fact, the US is running South Korea's setup in slow motion. Notably, FINRA data shows that margin debt hit a record $1.42 trillion in May, up 53.7% year on year. This is the fastest accumulation in roughly three decades. Zero-day-to-expiry (0DTE) options now account for 59% of all S&P 500 volume, per Cboe's full-year 2025 data, with retail responsible for half or more of that flow.

This is also why we’ve seen an explosion of interest from institutional investors in retail-facing investment and trading platforms. The ‘smart’ money is increasingly realising that the best business to open this decade is one that caters to the financial anxiety of the younger generations.

Notably, prediction market platform Kalshi raised $1 billion at a $22 billion valuation in May, led by Coatue, with Sequoia, a16z, Paradigm, IVP, Morgan Stanley and ARK Invest. That doubled its valuation in five months. A recent Financial Times report also revealed that the platform is already in talks to raise its next funding round at a valuation of about $40 billion.

If you ask us, betting on this generation getting more sensible is a losing trade. As long as wage growth trails assets, the ‘gambling’ generation will continue rolling the proverbial dice.

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📖 Quote of the Week 📖

"Volatility is the price of admission. The prize inside is superior long-term returns. You have to pay the price to get the returns" - Morgan Housel

Team Coin Bureau

Disclosure: Authors may own cryptoassets named in this newsletter. These are unqualified opinions, and a Coin Bureau newsletter, is meant for informational purposes only. It is not meant to serve as investment advice. Please consult with your investment, tax, or legal advisor.