South Korea experienced a dramatic increase in cryptocurrency trading amid a political crisis, leading to the declaration of martial law.
Impact of Martial Law on the Crypto Market
President Yoon Suk-yeol's decision to declare martial law on December 2, 2024, added uncertainty, prompting a rush to sell cryptocurrencies. He cited 'anti-state' forces as a threat to state affairs, justifying the martial action.
Price Drop and the 'Kimchi Discount'
The news of martial law led to sharp declines in cryptocurrency prices on South Korean exchanges. Bitcoin dropped by 33% to 61.2 million Korean won on Upbit, causing the 'kimchi discount' where local exchange prices were lower than global platforms.
Political Backlash and Market Recovery
After the reversal of martial law following political protests, cryptocurrencies began to recover. By afternoon, Bitcoin and Ethereum almost regained their positions, closing the gap between South Korean and global exchange prices to less than 1%.
As the political situation in South Korea calms, the local crypto market stabilizes, though the trading surge remains a significant event.
