🚨 Korean Retail Investors Expand Influence in US Market through Quantum Computing Company Investment
Today Korean Economic News | 2025.03.24
📌 Korean Retail Investors Expand Influence in US Market through Quantum Computing Company Investment
💬 Recently, Korean individual investors, nicknamed 'Seohaggaemi,' are actively participating in the US stock market and gaining attention particularly for their investment in the quantum computing company IonQ (IONQ). This concentrated investment is affecting IonQ's stock price volatility and company valuation.
1️⃣ Easy Understanding
Korean individual investors, known as 'Seohaggaemi,' are increasing their presence in the US stock market. Their concentrated investment in the quantum computing company IonQ (IONQ) is particularly noteworthy. Let me explain what this phenomenon is and why it's important.
'Seohaggaemi' refers to Korean individual investors who invest in US stocks. 'Seo' means west, and 'gaemi' means ant, referring to small individual investors. In recent years, many Korean investors have turned to the US market due to low interest rates and sluggish domestic stock market performance.
What's particularly noteworthy is that they are concentrating their investments in a quantum computing company called IonQ. Quantum computing is a next-generation computing technology that maximizes computational power using quantum mechanics principles, unlike conventional computers. Due to its incredible calculation speed, it's considered a game-changer for future industries as it can solve complex problems in artificial intelligence, drug development, financial modeling, and more.
IonQ is a US quantum computing startup founded in 2015 and listed on NASDAQ in 2021. Founded by researchers from the University of Maryland and Duke University, the company is developing quantum computing systems based on quantum ion trap technology.
There are three main reasons why Korean retail investors are interested in IonQ. First, the long-term growth potential and innovative possibilities of quantum computing. Second, quantum computing is being noted as the next technological revolution alongside the AI boom. Third, collective interest in specific stocks has grown through information sharing via social media and investment communities.
This concentrated investment by Korean retail investors is actually affecting IonQ's stock price and trading volume. Over the past six months, IonQ's stock price has shown considerable volatility, with trading volume noticeably increasing during the hours when Korean investors' buying pressure strengthens.
This phenomenon of individual investors from a specific country affecting the stock price of a foreign company shows an important change in the global financial market. Digital investment platforms have made cross-border investment easier, and individual investors are establishing themselves as important market participants alongside institutional investors. It's worth paying attention to how quantum computing technology developments and the investment behavior of Korean retail investors will unfold in the future.
2️⃣ Economic Terms
📕 Seohaggaemi
Seohaggaemi refers to Korean individual investors investing in the US stock market, symbolizing the expansion of domestic investors' overseas investments.
- It's a term contrasted with 'Donghaggaemi' (domestic stock investors), meaning individual investors investing in the west (US).
- It continues to increase due to low-interest environment, limitations of the domestic market, and the need for diversified investment.
📕 Quantum Computer
Quantum computers are next-generation computing technology using quantum mechanics principles, showing overwhelming performance in specific problems compared to conventional computers.
- They use qubits as basic units and utilize quantum mechanical properties such as superposition and entanglement.
- They are expected to bring innovative changes in fields requiring complex calculations such as cryptography, drug development, artificial intelligence, and weather prediction.
📕 Liquidity
Liquidity refers to the ease with which an asset can be quickly converted to cash without loss of value.
- In the stock market, it indicates the degree to which a specific stock can be quickly traded at the desired price.
- Highly liquid markets have low transaction costs and efficient price discovery, while lack of liquidity can increase price volatility.
📕 Thematic Investment
Thematic investment is an investment strategy focusing on specific industries, technologies, or trends, pursuing medium to long-term growth potential.
- Investments in future industries such as quantum computing, artificial intelligence, and renewable energy are representative examples.
- It has characteristics of high growth potential along with high volatility and risk.
3️⃣ Principles and Economic Outlook
💡 Background of the Seohaggaemi Phenomenon and Factors for Expanding Influence
The Seohaggaemi phenomenon is a result of various economic, technological, and social factors working together, and the following factors are contributing to the expansion of their influence.
First, the limitations of the domestic investment environment and increased interest in global diversified investment are the basic driving forces of the Seohaggaemi phenomenon. The Korean stock market represents only about 2% of the global market in terms of size, and its industrial composition is concentrated in specific fields such as semiconductors, automobiles, and shipbuilding. Therefore, to invest in global innovative companies like Tesla, Apple, Amazon, or cutting-edge industries like quantum computing, access to overseas markets is essential. Additionally, as low interest rates have persisted, funds seeking higher-yield investments instead of bank deposits have increased. In this situation, the US market has emerged as an attractive alternative for Korean investors with its diverse industries and companies, and relatively high liquidity and transparency.
Second, improved investment accessibility and information democratization have accelerated the expansion of Seohaggaemi's influence. In recent years, the development of overseas stock investment platforms and reduction in fees have greatly improved accessibility to US stocks. Overseas investments, which were previously limited to institutional investors or the wealthy due to significant fees and complicated procedures, are now easily accessible to general individual investors. Furthermore, as information sharing through social media, investment communities, and YouTube has become active, information asymmetry about foreign companies and industries has decreased. Investors share real-time overseas market trends and corporate information, forming collective intelligence. This democratization of information plays an important role in the investment decisions of Seohaggaemi, especially in cutting-edge technology fields like quantum computing.
Third, thematic investment and preference for growth stocks have led to concentrated investments in specific companies like IonQ. Among Seohaggaemi, thematic investment in future industries and innovative technologies is popular rather than short-term profits. Especially after COVID-19 accelerated digital transformation, interest in future growth industries such as artificial intelligence, cloud, and electric vehicles has increased. Quantum computing is at the pinnacle of these future technologies, with innovative potential to surpass the limitations of existing computing, attracting many investors' attention. Since its NASDAQ listing in 2021, IonQ has been actively discussed in Korean investment communities, forming high expectations as the 'next NVIDIA.' This collective interest has led to actual investments, significantly increasing the proportion of IonQ holdings by Korean investors.
Fourth, changes in investment culture and active participation by the MZ generation are also strengthening the Seohaggaemi phenomenon. Korea's traditionally real estate-centered investment culture is diversifying into financial assets, especially stock investments. The MZ generation, digital natives, tend to approach investments with a global perspective that isn't constrained by national borders. They feel more familiar with global big tech or innovative companies than Korean companies and respond sensitively to new technologies and trends. Cutting-edge technology fields like quantum computing are particularly attractive to these MZ generation investors. Additionally, information exchange and collective decision-making through online communities significantly influence their investment behavior, which can lead to concentrated investments in specific stocks.
These factors are working together to expand the influence of Seohaggaemi in the US market, having a significant impact on the stock price and trading volume of specific companies like IonQ. In particular, the observation that IonQ's trading volume increases and price volatility grows during the hours when the Korean market is open (evening to midnight US time) empirically demonstrates the influence of Seohaggaemi.
💡 Current State of the Quantum Computing Industry and Investment Value
The quantum computing industry is in its early stages but experiencing rapid development, with various perspectives on its investment value.
First, what stage is quantum computing technology at and what developments is it making? Quantum computing is still in the early development stage, but important technological breakthroughs have been made in recent years. Currently, large technology companies like IBM, Google, Amazon, and startups like IonQ and Rigetti Computing are focusing on improving the performance of quantum processors. As the number of qubits increases and error rates decrease, we're getting one step closer to practical quantum advantage. Since Google announced achieving 'quantum supremacy' with a 53-qubit quantum processor in 2019, the pace of technological development has accelerated. IonQ has commercialized a 32-qubit system and aims to develop systems with 64 or more qubits in the next few years. Also, quantum computing access through cloud
Second, what is the economic potential and market size of quantum computing? Quantum computing has the potential to bring revolutionary changes to various industries including finance, pharmaceuticals, logistics, and artificial intelligence. In finance, it can be used for portfolio optimization, risk analysis, and fraud detection; in pharmaceuticals, it can significantly reduce drug development time. In logistics, it can solve complex route optimization problems, and in artificial intelligence, it can improve learning speed and accuracy. Market research institutions forecast that the global quantum computing market will grow from about $1 billion in 2024 to over $30 billion by 2030. In particular, quantum cloud services and quantum algorithm development fields are expected to lead initial growth.
Third, what is IonQ's company status and competitiveness? IonQ is a quantum computer development company using quantum ion trap technology, which has been making continuous technological progress since its founding in 2015. Founded by researchers from the University of Maryland and Duke University, the company was listed on NASDAQ in 2021 through a SPAC merger. IonQ's differentiation point is that the ion trap method is relatively stable and scalable. It also provides an environment for companies to test and develop quantum algorithms through its quantum cloud service, 'Quantum Cloud'. However, it faces fierce competition from large technology companies such as IBM, Google, Microsoft, and other startups like Rigetti Computing and PsiQuantum. Financially, it is still in the early stages requiring significant R&D investment, with full-scale revenue generation remaining a medium to long-term challenge.
Fourth, what are the risks and opportunity factors in investing in quantum computing companies? Investments in quantum computing involve significant risks as well as great opportunities. Risk factors include: ① Technological uncertainty: Error correction and stability issues in quantum computers have not been fully resolved. ② Uncertainty in commercialization timing: It's difficult to accurately predict when practical quantum computers will be fully commercialized. ③ Intensified competition: Competition is fierce with active investments from large technology companies. ④ Valuation risk: Volatility is high due to valuations based on future value rather than current revenue. On the other hand, opportunity factors include: ① Game-changer technology: Quantum computing has the potential to fundamentally change the computing paradigm. ② First-mover advantage: Early technological leadership can lead to long-term market dominance. ③ Wide range of applications: It's a general-purpose technology that can bring innovation to various industries. ④ Expanding government support: Major countries such as the US, China, and EU are making large-scale investments in quantum technology development.
Overall, quantum computing is a future industry with innovative potential, but investors need a cautious approach considering technological uncertainty, commercialization timing, and valuation risks. Particularly when investing in individual companies like IonQ, a comprehensive assessment of the company's technological differentiation and competitiveness, financial situation, and management capabilities is necessary. It should always be kept in mind that it's an investment that accompanies high volatility and risk along with long-term growth potential.
💡 The Influence and Implications of Cross-Border Individual Investors
The expanding influence of cross-border individual investors is a new trend in the global financial market, providing various implications.
First, the impact of collective behavior of individual investors on market dynamics is increasing. Traditionally, financial markets have been dominated by institutional investors, but recently, the influence of individual investors has been increasing due to the development of digital platforms and improved information accessibility. As seen in the 'GameStop' incident in early 2021, individual investors organized through social media and online communities can have a significant impact on the stock price of specific stocks. The investment in IonQ by Seohaggaemi shows a similar pattern, with trading volume increasing in the US market timed with the opening of the Korean market. This shows that individual investors from a specific country can have a significant impact on another country's stock market. This phenomenon requires a reconsideration of existing market efficiency and price discovery mechanisms, and understanding the impact of investment psychology and social dynamics on the market becomes even more important.
Second, the democratization of information and formation of cross-border investment communities are changing the way investment decisions are made. In the past, there were investment information and communities separated by country, but now information is quickly shared through global social media and investment platforms. Korean investors acquire real-time information about US companies and make investment decisions based on this. Especially in cutting-edge technology fields like quantum computing, expert opinions, research reports, corporate announcements, etc. are quickly translated and shared, which has the effect of reducing information asymmetry. Also, analysis and opinion formation through collective intelligence take place within investment communities, enhancing the information processing capabilities of individual investors. These changes can have positive aspects that increase the information efficiency of the financial market, but can also increase the risk of collective herding phenomena and investment bubbles.
Third, the expanded participation of individual investors is having a complex impact on corporate valuation and market volatility. Unlike institutional investors based on traditional financial analysis and valuation models, individual investors often tend to place greater weight on qualitative factors such as growth stories, innovation potential, and technological advantages. This is even more pronounced in early-stage industries like quantum computing. In the case of IonQ, expectations for technology and future growth potential, rather than current revenue, are becoming the main drivers of valuation. This investment approach can play a positive role in providing funds for companies' long-term innovation and growth, but at the same time, there is a risk of increasing short-term price volatility and causing a rapid correction if there is a gap between expectations and actual performance.
Fourth, the expansion of cross-border capital flows presents new challenges to the global financial system and regulations. The Seohaggaemi phenomenon shows that individual investors' overseas investments are becoming a structural trend, not a temporary phenomenon. This is creating new forms of financial connectivity along with increased capital movement between countries, according to differences in exchange rates, interest rates, and regulations. For example, Korea's financial policies or economic conditions could affect the stock price of specific US companies. Also, different investor protection systems and financial regulations by country can be new risk factors in cross-border individual investments. Regulatory authorities need a balanced approach that maintains investor protection and market stability while ensuring accessibility to global investment opportunities in response to these changes.
In conclusion, the expanding influence of cross-border individual investors like Seohaggaemi represents an important structural change in the global financial market. These changes are having various effects on market dynamics, information flow, corporate valuation, and the regulatory environment. Investors, companies, and regulatory authorities all need a balanced approach to adapt to this new reality, utilizing opportunities while managing risks.
4️⃣ In Conclusion
The expanded participation of Korean individual investors, known as 'Seohaggaemi,' in the US stock market, particularly their concentrated investment in the quantum computing company IonQ, shows important changes in the global financial market. The influence of individual investors is expanding due to the development of digital investment platforms, improved information accessibility, and the formation of cross-border investment communities, which is having a significant impact on the stock price and trading patterns of specific companies.
Quantum computing is an innovative technology that surpasses the limitations of existing computing, with the potential to bring transformation to various industries such as finance, pharmaceuticals, logistics, and artificial intelligence. Although it's in the early stages of development, technological progress is accelerating, and it's expected to grow into a market of over $30 billion by 2030. IonQ has competitiveness based on quantum ion trap technology, but faces fierce competition with large technology companies and other startups.
The investment in IonQ by Seohaggaemi can be seen as a result of the combination of thematic investment strategies for future growth industries, information sharing through social media, and the global perspective of the MZ generation. This phenomenon may increase stock price volatility in the short term, but in the long term, it can play a role in providing funds to innovative companies.
Investors need an approach that comprehensively considers the innovative potential of quantum computing along with technological uncertainty, commercialization timing, competitive landscape, and valuation risks. In particular, they should recognize that investment in early-stage companies like IonQ accompanies substantial risks along with high return potential.
The global financial market is forming new dynamics with the expanded influence of cross-border individual investors. This presents challenge factors such as collective herding phenomena and investment bubble risks, along with positive aspects such as the democratization of information and improved investment accessibility. A deeper understanding and research on cross-border individual investor behavior and its impact, such as the Seohaggaemi phenomenon, will be needed in the future.