Martial law paralyzes South Korea's crypto market
In U.S. dollar terms, BTC fell to as low as $62,000
The introduction of martial law in South Korea on December 3 triggered a sell-off on cryptocurrency exchanges, causing the prices of many digital assets to drop by 20% or more during the day.
Within an hour of President Yoon Suk-yeol's televised announcement of "emergency martial law" to protect the country's democracy from "anti-state forces" linked to North Korea, and based on powers granted to him, Bitcoin paired with the national currency (the won) plunged by over 30%. In U.S. dollar terms, BTC fell to as low as $62,000.
According to journalist Colin Wu, at certain points, ETH and DOGE traded 23% lower against the won compared to the previous day, XLM dropped 22%, XRP fell 20%, and LINK experienced a 33% decline.
Parliament opposes the president
The martial law declaration followed a political crisis, including the declining personal approval ratings of President Yoon Suk-yeol in recent months and failed debates over the 2025 budget between the ruling party and the opposition.
However, the National Assembly overturned the president’s decision on Tuesday evening. Han Dong-hoon, leader of the ruling People Power Party, called the declaration a mistake and unconstitutional, pledging to oppose the emergency measures alongside the public.
The parliament’s decision helped stabilize the situation and laid the groundwork for the recovery of the crypto market. Bitcoin, for instance, rebounded to $89,000, creating an arbitrage gap of approximately $4,000.
Martial law in South Korea entails a ban on all political activities, the suspension of political parties, and the transfer of all media and publishing outlets under state control. Violators of this regime can be subjected to searches, detention, or arrest without a court warrant and may face penalties, including the death penalty.
Retail cryptocurrency trading volumes in South Korea reached $18 billion in the last 24 hours, surpassing the country's stock market by 22%, according to a report by analytics firm 10x Research. As reported by Cointelegraph, crypto trading volumes hit their second-highest level of 2024, driven by South Korean traders' interest in altcoins.
Ripple's XRP led the way with $6.3 billion in trading volume, followed by Dogecoin at $1.6 billion, Stellar at $1.3 billion, Ethereum Name Service (ENS) at $900 million, and Hedera (HBAR) at $800 million.
