Yesterday, the South Korean crypto market suffered a violent drop after an emergency martial law was declared. This caused a massive sell-off that sent the price of most cryptocurrencies to monthly lows.
After the turmoil, local exchanges saw a record-breaking daily trading volume for the second consecutive day, nearly doubling the previous milestone.
South Korea’s Crypto Trading Volume Sees Record Day
On Tuesday, Bitcoin (BTC), Ethereum (ETH), XRP (XRP), and most cryptocurrencies saw a massive price drop in South Korean crypto exchanges following the first declaration of an emergency martial law in the country in 44 years.
Bitcoin’s price violently dropped against its South Korean won trading pair in local exchanges, falling around 33% to 88.26 million RWM, worth around $62,000, on Korea’s largest crypto exchange, Upbit.
Similarly, Ethereum retraced 38% to trade at 3.12 million KRW, or approximately $2,200. Meanwhile, XRP saw the largest retrace among the top three cryptocurrencies, nosediving 60% from the 4,000 KRW mark to as low as 1,623 KRW, or about $1.23.
Amid the shakeout, whales deposited over 163 million USDT to Upbit, seemingly aiming for “bottom-phishing opportunities.” Notably, local crypto exchanges registered a massive trading volume spike, hitting its second record-breaking volume this week.
Upbit recorded a massive $27.25 billion trading volume on December 3, followed by Bithumb’s $6 billion, while Coinone and Korbit had a daily volume of $531 million and $192 million, respectively. The massive volumes added over $34 billion traded in 24 hours across these exchanges, surpassing December 2’s $18 billion milestone by 88%.
On Monday, 10x Research founder Markus Thielen revealed that South Korean crypto volume had recorded its second-largest level this year, surpassing the $14 billion traded in the local stock market by 22%.
Per the report, retail-focused trading volumes in South Korea had seen a massive surge, with XRP leading the way. The cryptocurrency registered $6.3 billion in volume on Monday, followed by Dogecoin’s $1.6 billion and Stellar’s $1.3 billion.
Thielen noted that “these high-momentum cryptocurrencies are being driven predominantly by retail traders, capitalizing on and reinforcing momentum-driven trends.”
The 6-Hour Martial Law Declaration
President Yoon Suk Yeol announced the measure on live TV, causing panic among Koreans during the following hours. During the briefing, he accused the country’s opposition Democratic party, which has a majority in the National Assembly, of sympathizing with North Korea and anti-state activities.
For context, a declaration of martial law replaces civilian government with military rule, restricting freedom of speech, protests, and civil rights. It also allows special changes to the authority of governments or courts and a warrant system by the provisions of related laws.
Yoon claimed to have taken the measure to “eradicate pro-North Korean forces and protect the constitutional democratic order.” Nonetheless, Democratic Party leader Lee Jae-Myung announced they would attempt to nullify the order as stated in the Korean law and live-streamed himself climbing the National Assembly’s gates.
It’s worth noting that, under Korean law, the president must lift the emergency martial law if the parliament requests it with a majority vote from its members. About three hours after the declaration, 190 present parliament members out of the 300 lawmakers voted against the martial law, which was accepted by the President a few hours later.
Since the market crash, most cryptocurrencies have recovered, trading above the pre-martial law levels. As of this writing, Bitcoin is trading at 135.2 million KRW, worth around $95,400.