South Korea’s Political Turmoil Sparks Currency Devaluation and Boosts Bitcoin Demand
South Korea’s ongoing political crisis has led to a significant devaluation of the country’s currency, the won, and a surge in demand for Bitcoin as a safe-haven asset. The won has dropped to its lowest value against the US dollar since March 2009.
South Korean Political Troubles
The country’s lawmakers recently filed a motion to impeach Prime Minister and interim president Han Duck-soo, just two weeks after President Yoon Suk-yeol was impeached. According to Jeff Park, Head of Alpha Strategies at Bitwise, the president’s ousting was a result of his attempt to implement martial law, which would have suspended civil rights and downsized government agencies. Park noted that the use of impeachment as a political tool and allegations of foreign election interference highlight the fragility of democracy in the face of disinformation.
Impact on Bitcoin Kimchi Premium
The news of the acting president’s impeachment triggered a drastic devaluation of the won, leading to a surge in the Bitcoin Kimchi Premium. The premium, which measures the gap between BTC’s price in South Korea and other countries, has increased to 3%, with local investors paying as much as $98,000 for BTC on the Upbit exchange, compared to $95,100 on Coinbase. Despite the increased price gap, local investors have flocked to dollar-denominated assets like BTC as a haven from the struggling won.
Increased Demand for Bitcoin
Historically, an increase in the Bitcoin Kimchi Premium has indicated a bullish streak on South Korean crypto exchanges. As the won continues to struggle, local investors are rapidly turning to Bitcoin as a safe-haven asset, driving up demand and prices on local exchanges.
Source: Cryptopotato.com
