South Korea experienced an unprecedented surge in cryptocurrency trading volumes, hitting $34.2 billion in 24 hours amid political crisis and martial law declaration by President Yoon Suk-yeol.
Impact of Martial Law on the Crypto Market
President Yoon's decision to declare emergency martial law on December 2 increased uncertainty, triggering panic selling in the crypto market. The president cited anti-state forces as the reason for the measure, deeming it necessary to safeguard South Korea's democracy and security. As the news spread, cryptocurrency prices dropped significantly, with Bitcoin plummeting to 61.2 million Korean won on Upbit.
Price Drop and the 'Kimchi Discount'
The price drop of Bitcoin and other cryptocurrencies on South Korean exchanges resulted in the 'kimchi discount,' where local prices fell significantly below global rates. Ethereum traded at a 7% discount and XRP lost more than half its value. TRON (TRX) saw a massive surge in trading volume and market cap, with its price rising by 95% in just one day.
Political Backlash and Market Recovery
Despite the initial shock, the situation changed when President Yoon's cabinet reversed the martial law decree. This came after pressure from lawmakers who condemned the emergency measure. The political shift led to a recovery in crypto prices, with Bitcoin regaining most of its value, and Ethereum and XRP reducing their price gap on South Korean platforms.
The surge in crypto trading volumes in South Korea amid political turmoil highlighted market vulnerabilities to external shocks, yet the swift price recovery showed resilience and adaptability.
