Martial Law Spurs Volatility in South Korea’s Crypto Market
The South Korean cryptocurrency market has experienced severe turmoil after South Korean President Yoon Seok-yeol unexpectedly declared martial law, resulting in a significant divergence between global and local cryptocurrency prices.
Bitcoin fell to $79,000 and XRP was trading at $1.89 on Upbit for over an hour. This has seen users flock to exchanges to submit buy orders and purchase these tokens at unprecedentedly low prices, ushering in a bull run.
South Korean cryptocurrency market briefly in disarray
The political crisis began when President Yoon declared martial law on Tuesday night, prompting the military to try to enter parliament. Yoon said the move was necessary to combat “pro-North Korea and anti-national forces.”
The news sent the country’s economy into temporary disarray. South Korean won surges against US dollar, which means South Korean won will briefly rise against the US dollar Cryptocurrency Arbitrage Opportunities open for USDT holders.
Bitcoin plunged more than 30% in late trading on Tuesday on South Korean exchanges including Upbit, while it fell just 2% in global markets. The stark difference reflected panic selling by local traders and a nearly 3% surge in the USD/KRW exchange rate.
According to Lookonchain report dataUpbit alone saw over $163 million in USDT inflows as many whales placed large USDT orders. However, lawmakers including their own party leader Han Dong-hoon quickly challenged martial law to restore economic order.
Parliamentary objections proved effective, lawmakers vote rejected martial law earlier on Wednesday. The market stabilized after parliament’s intervention, with Bitcoin recovering to $95,167 as of 17:30 UTC on Wednesday after briefly breaking above $96,000.
Predict market reaction
Political uncertainty has spread to cryptocurrency prediction markets, comprehensive market Initiate a bet a betting pool Regarding the possible resignation of President Yoon. The market asked whether Yoon will leave office between December 2 and 31, 2024. As of 17:30 UTC on Wednesday, approximately $257,000 had been bet, with a 61% chance of Yoon resigning.
The incident highlights the growing connection between political stability and cryptocurrency markets, especially in regions with high cryptocurrency adoption rates such as South Korea.
Throughout this year, local user activity in South Korea’s cryptocurrency market has continued to increase despite regulatory challenges. As BeInCrypto reported in October, the country saw Daily trading volume increased by a record 67%reaching 6 trillion won.
However, cryptocurrency exchanges, especially Upbit, have always faced regulatory hurdles. In November, financial regulators Flagged 600,000 potential KYC violations on exchanges. These violations have been Threat to Upbit’s License Update This is despite the exchange’s commitment to transparency.
Regulatory authorities have also opened a case for investigation Upbit’s potential monopoly Cryptocurrency market in South Korea. The exchange has also been accused of being linked to pump-and-dump schemes, exploiting regulatory loopholes and attracting scrutiny.
at the same time, South Korean exchanges hold nearly 35% of cryptocurrencies were delisted, half of which lasted less than two years. These delistings resulted in significant losses for investors due to reduced liquidity and plummeting prices of unavailable tokens.
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