South Korea experienced an unprecedented surge in cryptocurrency trading amid a political crisis, leading to $34.2 billion in trading volume within 24 hours.
Impact of Martial Law on the Crypto Market
President Yoon's decision to declare martial law on December 2 added uncertainty, prompting local traders to panic sell cryptocurrencies. He justified the measure as necessary to preserve the country's democracy and safety.
A Sharp Drop in Prices and the "Kimchi Discount"
Cryptocurrency prices on South Korean exchanges dropped significantly following martial law news. Bitcoin fell by 33%, and Ethereum and XRP also decreased in value, creating a "kimchi discount" where local exchange prices were much lower than global rates.
Political Backlash and Market Recovery
The situation changed when Yoon's cabinet reversed the martial law under lawmaker pressure. Cryptocurrency prices began to recover, narrowing the gap with global markets.
The South Korean crypto market demonstrated high volatility amid political events but quickly recovered, showing its resilience. This highlighted the importance of political stability for financial markets.
