South Korea's sudden martial law turmoil, the "Seoul winter" ripple effect on crypto markets
TechFlow Selected TechFlow Selected
South Korea's sudden martial law turmoil, the "Seoul winter" ripple effect on crypto markets
This winter, Seoul seems to be showing signs of repeating the tragedy of the "Seoul Spring" once again.
Navigating Web3 tides with focused insightsAuthor: Pzai, Foresight News
On the evening of December 3, South Korean President Yoon Suk-yeol unexpectedly declared a "state of emergency martial law" during a televised broadcast from the presidential office. Opposition party members confronted authorities outside the National Assembly that night, but by 4 a.m., the martial law decree—South Korea's first since 1980—was nullified by a parliamentary vote and subsequently lifted by President Yoon. The entire episode lasted only six hours, yet triggered significant volatility in financial markets, particularly within the cryptocurrency sector.
At the time of writing, trading pairs on Upbit have largely returned to normal. Bitcoin was priced at 134,640,000 KRW (approximately $95,000).
Market Reaction
Following the announcement, South Korea’s leading crypto exchange Upbit experienced trading outages due to overwhelming traffic. The BTC/KRW pair briefly spiked down below 90 million KRW (around $63,300), while the USDC/USDT exchange rate temporarily surged to 1.2.
Notably, XRP—a token especially popular among Korean investors—plummeted from $2.90 to as low as $1.16. As a relatively mature crypto market, South Korea saw retail trading volumes reach $18 billion on December 2 alone, driven largely by altcoins such as DOGE and XRP, with XRP accounting for $6.3 billion of that total. DOGE also briefly dropped below $0.23 during the turmoil.
In terms of other tokens, KAIA, a South Korean blockchain native token, dipped below $0.25 during the incident before recovering to $0.338.
Regarding exchange inflows, over 163 million USDT flowed into Upbit within one hour after the martial law announcement, reflecting investor appetite for bottom-fishing amid volatility. After South Korean authorities announced they would provide “unlimited liquidity” to the market and parliament voted to lift the decree, capital inflows rapidly stabilized market fluctuations.
On Polymarket, traders began placing bets on the likelihood of President Yoon’s impeachment. The probability of him leaving office this year rose to 61%, while the odds of his impeachment by Friday surged to 45% before declining to 33%.
Market Perspectives
After the event, South Korean regulators stated they are ready to deploy a 10 trillion KRW stock market stabilization fund and will take measures to normalize financial markets. In response, South Korea’s stock market opened as scheduled today, and affected tokens rebounded to normal levels.
The Geopolitical Business, a strategic consulting firm, noted that if the political crisis persists, both domestic and international operations could face disruptions or paralysis. However, the revocation of martial law and the Joint Chiefs of Staff’s decision to temporarily restrict troop movements—except for surveillance and guard duties—have helped ease market tensions.
Prior to this incident, South Korea’s crypto market had been attracting growing numbers of middle-aged and elderly participants. Recently, the number of users over 60 on major exchanges like Upbit and Bithumb has increased by 30.4% compared to the end of 2021. The aftermath of this political turmoil is likely to influence how users decide where to store their assets, potentially increasing demand for cryptocurrencies due to rising skepticism toward local equities and foreign exchange markets. Notably, XRP trading volume on Upbit has already surpassed that of the country’s KOSPI stock index.
Additionally, this volatility highlights how geographically concentrated fiat-based exchanges—mainly used by Koreans—are highly vulnerable to geopolitical shocks. In the coming period, some South Korean investors may shift toward on-chain liquidity solutions and decentralized asset storage.
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
Foresight News
