South Korea’s Political Turmoil Leads to Record $34.2 Billion Crypto Trading
South Korea experienced political turmoil when President Yoon Suk Yeol briefly declared martial law, causing widespread uncertainty that affected stock and cryptocurrency markets. The decision was quickly reversed.
Market Impact
The announcement led to a 2% decline in South Korea's stock market, with Samsung and LG Energy Solution shares dropping by 1% and 2.8%, respectively. In response, the government planned to inject nearly $7 billion into the market to stabilize conditions.
Cryptocurrency Market Surge
During this period, South Korea’s cryptocurrency trading volume surged to $34.2 billion, nearly doubling the previous high of $18 billion. Upbit, the leading crypto exchange, processed $27.25 billion of these transactions.
Bitcoin Price Fluctuations
Bitcoin’s price fell sharply to 88 million won ($62,182) during the martial law declaration as traders reacted to the situation. This spike in activity caused outages on some exchanges, but prices stabilized once martial law was rescinded.
Political Repercussions
The president's rapid reversal drew criticism, with opposition parties considering charges of treason and discussing impeachment. These events highlighted the fragility of South Korea’s financial markets, particularly regarding the crypto sector's vulnerability to liquidity shocks amid political instability.
Analyst Attention
By Wednesday, the situation had calmed, yet it attracted the attention of analysts and betting markets. On Polymarket, bets on President Yoon’s early resignation rose to odds of 78% before settling at 47%.
Conclusion
This episode illustrates the susceptibility of financial markets, especially cryptocurrencies, to political events, emphasizing how quickly disruptions can occur even in advanced economies.