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The declaration of martial law in South Korea caused Cryptocurrency prices to fall on local exchanges Upbit and Bithumb, in addition to causing system outages due to traffic spikes. For example, on Upbit, Bitcoin fell to $65,000, while major altcoins such as XRP, Dogecoin, and XLM saw price drops of up to 20%.
While retail investors rushed to withdraw funds, some whales saw the market decline as an opportunity. According to Lookonchain, the whales transferred more than $163 million in USDT to Upbit, intending to take advantage of the discounted prices. While prices have since recovered, analysts predict the fallout for the market will persist.
Yoon Suk Yeol imposes martial law: Political tension at the limit
In the first instance, on Tuesday in South Korea, President Yoon Suk Yeol declared the application of martial law, the imposition of direct military control over the functions of the civilian government, as a measure to respond to growing criticism from the left-wing opposition party. to the current administration.
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In addition, martial law in South Korea is a rather complicated issue that has generated a lot of controversy. Basically, martial law involves a state of emergency in which military authorities assume control of a designated area during emergency situations. This means that civil laws are temporarily suspended and the armed forces have the power to impose their authority.
But why was martial law declared in South Korea? Yoon Suk Yeol declared martial law amid a political crisis, arguing that it was necessary to maintain order and security. However, this decision was highly criticized by the opposition and various sectors of society, who considered it an excessive and undemocratic measure.
Analysts warn: Volatility in the South Korean crypto market will continue
To all this, the trader ltrd wrote that during the declaration of martial law, “all the players simply disappeared from the market.” Specifically, he stressed: “The reason is simple: it is outrageously difficult to enter and operate in the Korean market. This means that only a few players can provide liquidity and arbitrage those discrepancies.”
Why was there no liquidity? The reason is simple—it is shockingly hard to enter the Korean market and trade there. This means that only a few players can provide liquidity and arbitrage those discrepancies. You can see that the spread jumped to 10% (!!!). pic.twitter.com/bbS3KAPQCT
— ltrd (@ltrd_) December 3, 2024
On the other hand, Min Jung, research analyst at Presto Research, said: “Other developments, such as a possible impeachment, could lead to volatility. However, the impact is expected to be limited to the domestic market and short-term volatility.”
Meanwhile, Seunghwa Lee, research director at DeSpread, indicated that such political instability could exacerbate global market volatility in certain cryptocurrencies that are heavily traded in the country.
In short, the declaration of martial law in South Korea caused a deep shock in the crypto market. It is evident that political and regulatory stability are key factors for the sustainable development of this market.
In closing, six hours after the declaration of martial law, 191 legislators in the South Korean Parliament voted in favor of annulling it. President Yoon accepted the decision and lifted the order, easing tensions. Following the annulment, Bitcoin prices rebounded, trading at $95,000.
I leave with this phrase from Karl Popper: “True ignorance is not the absence of knowledge, but the fact of refusing to acquire it.”
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