The South Korean parliament experienced significant turmoil yesterday when President Yoon Suk-Yeol declared a state of emergency under martial law. Although the emergency was lifted within six hours, the aftermath had already begun to ripple through the markets. Bitcoin saw a sharp decline, plummeting 30% on Upbit shortly after the announcement. Let’s understand how this political volatility has affected the crypto landscape.
Bitcoin’s Volatility
Hours after President Yoon’s declaration, Bitcoin’s price plunged by more than 30%, dropping to $62,000 on Upbit’s KRW trading pairs, according to data from TradingView. This sharp decline highlighted the sensitivity of South Korea’s crypto market to political developments. Fortunately, the price has since rebounded and is currently trading around $94,989.
Read also: Bitcoin’s Path to $100K: What Does the $95K Level Mean?
Political Fallout and South Korea’s Crypto Market Impact
President Yoon finds himself under intense scrutiny, with the opposition party demanding his immediate resignation. If he refuses, there are threats to submit a motion for impeachment, potentially igniting further political instability. This ongoing turmoil could disrupt not only the political environment but also impact investor confidence in South Korea’s crypto market.
Yoon, known for his crypto-friendly stance, has consistently advocated for deregulating the industry to foster innovation and competitiveness. His potential resignation could lead to uncertainty and renewed market volatility, especially given his role in shaping pro- crypto policies.
The South Korean crypto market is substantial, with recent reports indicating significant trading activity. The 24-hour trading volume in the country’s virtual asset market recently stood at 23 trillion won, contributing approximately 9% of the global total trading volume of 262 trillion won. This highlights the significance of stability in this area, especially with more senior citizens joining the crypto investment trend.
Government Stabilization Measures
In light of the unfolding political crisis, South Korea’s regulatory agencies have assured the public that a 100 trillion won stock market stabilization fund is ready for deployment if needed. This proactive measure aims to mitigate market shocks and support both the stock and crypto markets during periods of instability, demonstrating that the government has a recovery plan in place. Whether this will be sufficient to repair potential damage to the crypto market remains uncertain-only time will tell.
