Urooj NazirThe recent imposition of martial law in South Korea has rocked the Bitcoin market, causing an all-time high in trading activity. Local exchanges recorded a record-breaking $34 billion in cryptocurrency trading activity in a single day, which is the biggest amount for 2024. Panic among South Korean investors, who hurried to sell their shares out of concern for political unrest, was a major factor in this spike.
On December 3, 2024, President Yoon Suk-yeol declared martial law in response to worries about North Korean military threats. Widespread protests and conflicts between law officers and the public were exacerbated by the news. Financial markets were immediately affected by this political unrest, with cryptocurrency exchanges being particularly hard hit. CoinMarketCap data shows a sharp increase in trading activity from major South Korean exchanges, including Upbit, Bithumb, and Coinone. About $27.25 billion was processed by Upbit alone, which accounted for the highest portion of the total trading volume during this time.
Shortly after the announcement, Bitcoin’s value fell precipitously, falling 33%, while altcoins like XRP and Solana witnessed even than severe losses. These fluctuations show how sensitive the cryptocurrency market is to changes in world politics. Since panic sparked a selling frenzy, many analysts blame these price declines on a lack of liquidity and the absence of important market participants.
South Korean parliament stepped in and revoked martial law within six hours, despite the fact that the situation quickly worsened. This choice started to calm the market, and as investor confidence showed signs of recovery, Bitcoin’s price rose to ₩135 million ($95,000) the next morning.
Despite the swift reversal, analysts are closely monitoring South Korea’s crypto market for lingering vulnerabilities. This event underscores the market’s dependence on liquidity providers and the risk posed by sudden geopolitical changes. Experts suggest that reforms should focus on improving diversification among liquidity sources to prevent similar market shocks in the future
For a long time, South Korea has served as a global center for cryptocurrency trading. The local market’s durability has come under scrutiny due to the abrupt volatility caused by political events. However, stability should return in the upcoming weeks due to recovery efforts and robust demand. After this extraordinary period of uncertainty, investors are still cautious but optimistic that the market will soon return to balance.
