On Tuesday evening, South Korean President Yoon Suk Yeol declared “emergency martial law,” accusing opposition parties of undermining the government and aligning with North Korea. This announcement sparked political uncertainty, which soon spilled over into the cryptocurrency market, leading to significant price drops. Bitcoin (BTC) and XRP, two of the most widely traded digital assets on South Korean exchanges, saw their prices plummet by as much as 30%.
The Immediate Price Drop on South Korean Exchanges
Following the declaration of martial law, Bitcoin saw a sharp decline on Upbit, one of South Korea’s largest exchanges, dropping from around $96,000 to $63,000 USD. XRP also experienced a similar drop in value, with both cryptocurrencies quickly recovering some of their losses. Despite the recovery, the dramatic swing in prices highlighted the volatility of crypto assets, particularly in response to political events.
South Korea’s Role in the Global Crypto Market
South Korea is a major player in the global cryptocurrency market, with exchanges like Upbit and Bithumb consistently posting high trading volumes. The influence of South Korean traders on global crypto prices cannot be underestimated, as local buying and selling activity can significantly impact global markets. This was evident when the political unrest led to swift price movements in major cryptocurrencies.
Exchange Delays Due to Increased Trading Volume
In the aftermath of the martial law announcement, Upbit and Bithumb both reported delays in their system performance. These delays were caused by a surge in trading activity as traders rushed to react to the unexpected political developments. The rapid increase in transaction volume is a clear sign of the high level of engagement South Korean traders have in the crypto market, amplifying the effects of market sentiment on local exchanges.
What This Means for Crypto Traders
While Bitcoin and XRP have since regained some value, the sudden price drop and subsequent recovery serve as a reminder of the inherent volatility of cryptocurrencies. Political events, especially those involving major economies like South Korea, can trigger sharp price swings. Crypto traders need to remain alert and be prepared for sudden fluctuations, as external factors like government decisions can cause swift market movements, particularly in regions with high crypto activity.
