In a shocking turn of events, major cryptocurrencies like Bitcoin and XRP briefly crashed as much as 30% on South Korean exchanges late Tuesday evening. The sudden plunge came shortly after South Korean President Yoon Suk Yeol declared a state of “emergency martial law,” alleging that opposition parties were undermining the government and paralyzing the nation’s legislative process.
Crypto Prices Wick Down Sharply on Local Exchanges
The negative sentiment quickly spilled over into crypto markets, with Bitcoin and XRP—two of the most heavily traded tokens on South Korean exchanges—plummeting as low as 30% against the Korean won on platforms like Upbit. According to data from the exchange, Bitcoin briefly fell from 96,000 to 63,000 in U.S. dollar terms, based on current exchange rates, before rapidly recovering.
A similar pattern played out with XRP, which is also widely traded by South Korean investors and often sees significant volume on local exchanges. The sharp drop and quick rebound suggest that the moves may have been driven by a knee-jerk reaction and panic selling in response to the martial law declaration, rather than a fundamental shift in market dynamics.
South Korean Traders Known for Driving Crypto Rallies
Cryptocurrency trading is extremely popular in South Korea, with the nation’s investors known for their enthusiasm and ability to drive dramatic price rallies, often referred to as the “Kimchi premium” phenomenon. South Korean exchanges like Upbit and Bithumb frequently rank among the top global platforms by trading volume, underscoring the significant influence that the nation’s traders can have on crypto asset prices.
“South Korean investors have a reputation for being very active in cryptocurrency markets, and their collective buying or selling can have a noticeable impact on prices,« said a Seoul-based crypto analyst who asked to remain anonymous due to the sensitive political situation. »When you see sudden, sharp moves like this on Korean exchanges, it’s often driven by local sentiment and trading activity.”
Exchanges Struggle with User Activity Surge
The dramatic price action and heightened interest from local traders appears to have put a strain on South Korean crypto exchanges. Both Upbit and Bithumb issued notices warning of potential delays in site performance and user experience due to a surge in traffic and activity following the martial law announcement.
Industry insiders say that while the exchanges have robust technical infrastructure, they can still be challenged by sudden spikes in user activity, particularly when driven by unexpected geopolitical events. The platforms are reportedly working to maintain stable operations and ensure a smooth trading experience for their customers despite the ongoing market volatility and political uncertainty.
Martial Law Declaration Shocks Nation
President Yoon’s martial law declaration came as a surprise to many South Koreans, with the leader accusing opposition parties of undermining national security and spreading pro-North Korean sentiment. The move grants the government sweeping powers to restrict civil liberties and crack down on dissent, raising concerns among citizens and international observers alike.
“This is a dark day for South Korean democracy,« lamented a human rights activist based in Seoul. »We fear that this martial law declaration could be used to silence legitimate political opposition and stifle free speech. The international community must keep a close eye on developments and hold the government accountable.”
As the nation grapples with the political crisis, the long-term impact on South Korea’s vibrant cryptocurrency industry remains to be seen. While the initial market reaction appears to have been largely driven by fear and uncertainty, experts caution that prolonged instability could weigh on investor sentiment and trading activity.
Crypto Community Watches and Waits
For now, the crypto community, both within South Korea and around the world, is closely monitoring the situation, with many hoping for a swift and peaceful resolution to the political turmoil. As one of the world’s leading cryptocurrency markets, any sustained disruption in South Korea could have ripple effects across the global industry.
Despite the near-term challenges, South Korean crypto advocates remain optimistic about the long-term prospects for the industry in the country. With a tech-savvy population, supportive regulatory environment, and strong institutional interest, many believe that South Korea will continue to be a key player in the global cryptocurrency landscape, even as it navigates the current period of political uncertainty.
