South Korea's martial law storm: the turmoil and calm of the crypto market

On the evening of December 3, South Korean President Yoon Seok-yeol announced a nationwide "emergency martial law". As soon as the order was issued, the Korean crypto market panicked and sold off, and many blue-chip altcoins fell by more than 30%. FUD sentiment spread to the world. Fortunately, the martial law was later lifted, the crypto market stabilized, and Bitcoin returned to above $96,500.

Yoon Seok-yeol claimed that the opposition party was disrupting the country and imposed martial law. This was the first time in South Korea since 1980. The martial law headquarters issued Order No. 1, the parliament was closed, and the opposition parties clashed with the police. Moon Jae-in called on the parliament to protect democracy. The parliament then voted, and 170 votes were in favor of lifting the martial law order. Yoon Seok-yeol accepted it. However, the Democratic Party of Korea still wanted to accuse Yoon Seok-yeol of civil strife and promote impeachment. The ruling party also discussed accountability plans, and the president's office and cabinet members resigned one after another.

In the crypto market, martial law caused South Korea's trading volume to soar to $34 billion, a record high for the year. Bitcoin once fell to $62,182, and trading on platforms such as Upbit was interrupted. The global market was also affected. Binance Bitcoin once fell to $93,578, and the entire network was liquidated for $611 million in 24 hours. However, after the government stated that it would stabilize the market and withdraw the order, Bitcoin rebounded, and a large amount of bargain-hunting funds poured into Upbit during this period. The Korean won also fell to a two-year low. PolyMarket traders predicted that the probability of Yoon Seok-yeol's government being overthrown before 2025 was 72%.

Recently, there have been major crypto-related events in South Korea, such as the central bank's interest rate cut on November 28, the postponement of cryptocurrency taxes on December 1 to 2027, and the collection of regulatory fees on crypto exchanges from December 3. Although the martial law storm has calmed down, Yoon Seok-yeol's subsequent situation may cause new variables in South Korea's local crypto market.