Last Tuesday, South Korean President Yoon Suk Yeol surprised the country by declaring martial law. The president’s surprise announcement, which was later reversed, created political chaos and shook markets.
South Korea the stock market fell On Wednesday morning the benchmark Kospi index fell 2% due to the turmoil. Even before the markets opened, the country’s vice minister of economy and finance stated that the government was willing to inject almost $7 billion to stabilize the market.
As Kospi’s top stock fell, SoKor’s cryptocurrency trading volume rose to $34.2 billion on popular exchanges such as Bithumb, Upbit, Gopax, and Korbit. Upbit processed the majority of crypto transactions worth $27.25 billion, underscoring its dominance in the country’s crypto market.
The price of bitcoin It also briefly fell on Korean crypto exchanges due to lack of liquidity, highlighting the vulnerability of the country’s crypto market.
Volatile trading session
South Korean stocks responded negatively to the president’s change of heart. The country’s vice president of economy and finance announced that the administration is ready to deploy up to $7 billion to address a possible market chaos.
In trading on Wednesday, the country’s popular stocks such as Samsung and LG Energ Solution fell 1% and 2.8%, respectively.
The country’s crypto market also saw a surge in activities, almost doubling the record of $18 billion set on December 2. According to South Korean cryptocurrency news outlet KWNewsThis was the highest single-day total for cryptocurrency trading during the year.
BREAKING: South Korean parliament votes 190-0 to lift martial law pic.twitter.com/08Sf0HHZ0C
– BNO News (@BNONews) December 3, 2024
Martial Law U-turn Wreaks Chaos on Crypto Market
He country’s crypto sector He also reacted negatively to last Tuesday’s political chaos. During the 6-hour martial law, the price of Bitcoin fell to 88 million won or $62,182 on popular crypto exchanges, reflecting a sell-off. As many holders and traders panicked selling BTC and cryptocurrencies, some exchanges suffered outages.
Just hours after declaring martial law, the president immediately rescinded the order, helping to stabilize markets. The country’s opposition immediately went to work, bringing treason charges against the president, with some campaigning for impeachment.
South Korea’s political instability may affect liquidity
Although the price of Bitcoin and the broader crypto market immediately stabilized on Wednesday, the political crisis highlighted the vulnerability of the country’s markets to liquidity shocks. Any political instability, such as the declaration of martial law, can affect cryptocurrency prices.
The South Korean political drama has also caught the attention of crypto betting markets and crypto commentators. On Polymarket, the odds for a $500,000 bet on President Yoon’s early exit peaked at 78% before settling at 47%.
Featured image from Pexels, chart from TradingView
