Chaotic Decline of South Korea's Digital Currency Industry under Martial Law, Reports Suggest

South Korea's cryptocurrency market has been thrown into turmoil due to the ongoing political instability in the country. The ruling party and the opposition have been embroiled in disputes over next year's national budget, causing uncertainty in the local cryptocurrency market.

This political tension led to the declaration of martial law by South Korean President Yoon Suk Yeol on December 3, 2024. The declaration triggered a sell-off in the South Korean cryptocurrency market, with trading becoming virtually impossible on all exchanges in the country.

The volatile nature of South Korea's cryptocurrency market is often influenced by the nation's political climate and regulatory environment. On December 2, the daily cryptocurrency trading volume in South Korea reached an impressive $18 billion, surpassing the stock market's turnover by 22%. However, the political disputes have since led to a decline in the market.

The prices of major cryptocurrencies like Bitcoin and XRP on Upbit, one of the world's most active cryptocurrency exchanges based in South Korea, have been significantly affected. Bitcoin's price on Upbit fell below $80,000, reaching $79,167, while XRP's price dropped to $1.89. The stablecoin USDT also saw a decline, falling to $0.89 on Upbit.

The Upbit Market Index (UMI) declined by 13.2% as a result of the political instability. All cryptocurrency exchanges in South Korea have suspended operations, making trading nearly impossible at the moment.

Despite the growth in trading volume the day before the martial law declaration, the political instability has had a lasting impact on the South Korean cryptocurrency market. The market, which consistently ranks as one of the leading markets for cryptocurrency trading globally, is currently in a state of recovery, with the prices of Bitcoin and XRP on Upbit now beginning to rise.

As the political situation in South Korea unfolds, the future of the cryptocurrency market remains uncertain. However, it is hoped that the market will stabilise as the political disputes are resolved and the country returns to normalcy.