Emily Walker
The South Korean cryptocurrency market experienced a sharp decline yesterday due to the declaration of emergency martial law, triggering a significant sell-off that drove most digital currencies to their lowest levels in a month.
In the aftermath, local exchanges reported an unprecedented daily trading volume, achieving near-record levels for the second consecutive day.
Record-Breaking Trading Volume in South Korea’s Crypto Market
On Tuesday, a substantial drop in prices for Bitcoin (BTC), Ethereum (ETH), XRP (XRP), and other cryptocurrencies occurred on South Korean exchanges, following the first martial law declaration in 44 years.
Bitcoin’s value plummeted dramatically on local platforms, declining about 33% to 88.26 million KRW, equating to roughly $62,000 on Upbit, the country’s largest exchange.
Ethereum also faced a significant drop of 38%, trading at 3.12 million KRW, or around $2,200, while XRP experienced the largest decrease, falling around 60% from the 4,000 KRW mark to approximately 1,623 KRW, equivalent to $1.23.
During this period of uncertainty, significant transactions were made as whales deposited over 163 million USDT to Upbit, seemingly seeking to capitalize on lower prices. Local exchanges reported a remarkable surge in trading volume, marking a second record-breaking day this week.
On December 3, Upbit achieved an impressive $27.25 billion in trading volume, followed by Bithumb with $6 billion and Coinone and Korbit with $531 million and $192 million, respectively. Altogether, these platforms saw over $34 billion traded within 24 hours, significantly surpassing the previous day’s $18 billion record by 88%.
Markus Thielen, founder of 10x Research, noted that South Korea’s crypto trading volume reached its second-highest level this year, exceeding the local stock market’s $14 billion by 22%.
The report highlighted a notable increase in retail trading volume, with XRP leading at $6.3 billion, Dogecoin at $1.6 billion, and Stellar at $1.3 billion.
Thielen pointed out that “these high-momentum cryptocurrencies are primarily driven by retail investors, who are exploiting and reinforcing ongoing market trends.”
Details of the 6-Hour Martial Law Declaration
President Yoon Suk Yeol announced the martial law in a live broadcast, causing widespread panic among citizens. During this announcement, he accused the opposition Democratic Party, which controls the National Assembly, of being sympathetic to North Korea and engaging in anti-state activities.
Martial law typically suspends civilian governance in favor of military authority, limiting freedoms of speech, assembly, and other civil liberties. It grants special powers to the government and alters judicial procedures as dictated by relevant laws.
President Yoon stated that the declaration aimed to “eliminate pro-North Korean elements and defend the constitutional democratic framework.” In response, Democratic Party leader Lee Jae-Myung vowed to contest this order, livestreaming his attempt to breach the National Assembly’s gates.
It is important to note that Korean law requires the president to revoke martial law if the parliament requests such action with a majority vote. Within three hours of the declaration, 190 out of 300 lawmakers voted against it, which the President accepted shortly thereafter.
Following the market crash, most cryptocurrencies have bounced back, recovering to levels above where they were prior to the martial law announcement. At the time of writing, Bitcoin is valued at 135.2 million KRW, roughly $95,400.
