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South Korea’s political turmoil caused a significant, though temporary, drop in Bitcoin prices on local exchanges.
The ‘Kimchi premium’ saw a stark decline, with Bitcoin falling to US$71,814.99 compared to the global average of around US$93,600.
President Yoon Suk Yeol later rescinded the martial law after a parliamentary vote to lift it.
The event sparked concerns around Bitcoin’s status as a Safe Haven asset among traders and observers.
Events in South Korea have caused prices on local exchanges to drop significantly, albeit only temporarily.
On Tuesday, Bitcoin and Co saw heightened volatility on Asian exchanges following South Korean President Yoon Suk Yeol’s declaration of martial law amid a parliamentary deadlock.
This political uncertainty significantly impacted Korean exchanges, where the “Kimchi premium” affected prices more starkly, with Bitcoin dropping to US$71,814.99 (AU$111,012.14) compared to a global average of around $93,600 (AU$144.687.56).
US White House Relieved Martial Law Over
Yoon later lifted the martial law following a vote in parliament. According to South Korean law, the government must do so if a majority votes for it. After the initial announcement soldiers tried to stop parliamentarians from accessing the national assembly to execute their voting rights.
Related: Bitcoin’s Road to $100k Faces Roadblocks, But Analysts Remain Confident
Yoon made the sudden announcement in a televised declaration, which he claimed was in response to threats from North Korea.
The United States and other countries around the globe reacted with concern to the events in Seoul, with a White House spokesperson telling CNN about the relief of the lift:
We are relieved President Yoon has reversed course on his concerning declaration of martial law and respected the ROK National Assembly’s vote to end it.
White House spokesperson
Bitcoin a Safe Haven During Times of Trouble?
The sell-off during such a tumultuous time left many analysts and observers scratching their heads. After all, Bitcoin is supposed to be a hedge against unstable times. CryptoQuant CEO, Ki Young Ju, wondered why “people selling now even buy Bitcoin in the first place?”
Bitcoin kimchi premium hits an all-time low. Shouldn’t Bitcoin go up during times of political instability?
Ki Young Ju, CryptoQuant
Crypto veteran Willy Woo offered his own take on the situation, saying that Bitcoin acts as a safe haven, but its performance can still reflect a risk-on attitude.
This means that in times of crisis, some investors might sell off Bitcoin seeking to manage risks, especially if they are viewing short-term charts that emphasise recent price fluctuations rather than longer-term trends. This behaviour is one way to try and explain why Bitcoin might not always rise in value during times of political instability.
Related: Gigantic Crypto-Ponzi Uncovered in South Korea, CEO Arrested over $365 Million Scam
Although, another user on X wasn’t having any of it, calling anyone who sells in such a situation mentally unstable. Funny enough though the tweet came from an account named Bitcopath, which has ‘Bitcoin Psychopath’ in its description – make of that what you will.
Selling Bitcoin in risk environment is a sign of mental illness. There is something called credit card if you have urgent stuff to buy which you won’t need , most likely, you think you do. Staying calm and planning beforehand is the key but as we know 99% is retard so here we…
— Bitcopath (@Osman539607) December 3, 2024