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South Korea declares martial law amid political tensions; the cryptocurrency market wobbles
Seoul, South Korea – December 3, 2024.
South Korean President Yoon Suk-yeol surprised the world by declaring martial law in an emergency televised speech. The measure, the first since the 1980s, aims to confront what the leader described as "pro-North Korean forces" and a threat to the constitutional order of the country. The decision comes amid internal political tensions, where the opposition-controlled Parliament attempts to impeach high-ranking officials loyal to the government.
Martial law implies the suspension of parliamentary activities, restrictions on media, and the deployment of military forces in various strategic areas of the country. However, in a historic vote just hours later, the South Korean Parliament revoked the measure, declaring the president's action invalid. Despite this, political uncertainty persists, with protests and clashes reported in Seoul and other major cities.
Impact on the cryptocurrency market
The news had an immediate impact on the financial market, especially in the cryptocurrency sector. South Korea, one of the most important markets for digital currencies, experienced significant volatility on local exchange platforms like Upbit and Bithumb.
Bitcoin (BTC): Within hours, the price of Bitcoin in the South Korean market fell from USD $96,000 to USD $63,000, a loss of more than 30% against the South Korean won. Ethereum (ETH) and other altcoins: Also suffered drastic price drops, with losses ranging between 20% and 40%.
Analysts attribute this decline to several factors:
Political uncertainty: Investors reacted with fear to possible government restrictions on exchange platforms and the use of cryptocurrencies. Massive sell-off: Local users, worried about economic and political stability, quickly liquidated their digital assets to preserve cash liquidity. Collapse of the South Korean won: Political instability weakened the local currency, causing collateral effects in the cryptocurrency market, where exchanges are predominantly conducted in won.
Global impact
While the most pronounced decline has been recorded in South Korea, the impact is beginning to be felt in the global market. The volatility in the price of Bitcoin and other cryptocurrencies, although lesser, has caused nervousness among international investors. South Korea represents a significant part of the global cryptocurrency trading volume, and any disruption in its market can trigger domino effects in other regions.
Moreover, the situation could affect mining operations and the technological infrastructure related to cryptocurrencies in the country, increasing uncertainty.
