After 44 years, South Korea suddenly experienced a martial law farce that lasted only six hours, a sudden move that shocked South Korea and the world, and triggered the market volatility, making the elderly feel the huge volatility in the crypto market.
Although the martial law has been lifted, the combination of political turmoil and market volatility has created huge arbitrage opportunities, and the influx of money has highlighted the ability of crypto markets to withstand regional risks.
South Korea's sudden martial law caused market turmoil, and money poured in for the bottom
On the night of December 3, South Korean President Yoon Seok-hyok suddenly announced an emergency martial law, accusing the largest opposition party in the country, disrupting the country and paralyzed the entire administrative system, and said he would clean up "anti-state forces". Subsequently, the Korean Capitol building was blocked, a number of armored vehicles into the city center, the Korean market sentiment quickly into panic. The last time South Korea declared martial law was in 1980, raising many concerns about whether the real-life version of Seoul Spring will repeat itself.
However, only hours later, South Korea's parliament passed a request to lift martial law after an emergency session. The opposition common Democratic Party said it would Sue President Yoon Xi-hyok, Defense Minister and Chief Administrative Security Minister for civil unrest, and push for impeachment. The Common Democratic Party said it is pushing for the impeachment of President Yoon Seok-hyok, and is expected to complete the drafting of the document within today. The ruling party has "reached some consensus" on the resignation, the resignation of the cabinet and the dismissal of the defense minister.
With the lifting of martial law and the South Korean government said it would provide unlimited liquidity to the market if necessary, market sentiment gradually stabilized. Although the future direction of South Korean politics is unknown, the political turmoil has created huge profit margins for the market.
During the period of martial law came into force, the Korean financial market experienced sharp fluctuations. Due to the strict KYC and foreign exchange control system in the Korean market, the liquidity of the Korean crypto exchange was relatively isolated, and the political changes caused a sharp dive in the Korean crypto market, including the short-term insertion of Bitcoin fell 30% and the short-term insertion of 60% in XRP. This wave of flash collapse led to a serious negative premium in the Korean market, and a large amount of arbitrage and bottom-hunting funds poured into the Korean exchanges, and even led to the interruption or delay of trading on Upbit, Bithumb and other platforms.
According to Upbit, a number of crypto exchanges totaled $34.2 billion in 24 hours, including $2.72 billion, according to CoinMarketCap. At the same time, according to Lookonchain monitoring, after South Korea announced martial law, many whales transferred a large number of USDT to Upbit, probably to buy bottom. Within one hour of the announcement, more than 1. [] 6.3 billion USDT units flowed into the Upbit. The negative premium of cryptocurrencies on Upbit soon narrowed with the influx of bottom-hunting and brick-moving funds.
It is worth mentioning that the Korean martial law storm also led to the reconstruction of some Korean concept stocks and MEME tokens were hyped. For example, A-share "Han Jian Heshan" shares opened by the daily limit, MEME coin "KoreaCTO" short jumped dozens of times last night.
Old fake coins have become the new favorite of Korean investors, and the post-60s pension into the market
South Korea's crypto market, which has long been known for its prominent retail herd behavior and kimchi premiums, has briefly outpaced the South Korean stock market in recent days. From the outbreak of market trading volume, the gradual improvement of policy and regulation, and the change of investor structure, South Korea has become one of the most important players in the global crypto market.
According to CryptoQuant data cited by Korean media Pulse, the total monthly trading volume of stablecoin in the top five CEX, Upbit, Bithumb, Coinone, Korbit and GOPX, was about 16. 17 trillion won (11.5 billion US dollars), a seven-fold increase from the about 2 trillion won recorded at the beginning of the year, and it is the first time that the monthly trading volume of stablecoin in South Korea exceeded 10 trillion won.
In fact, as the South Korean economy changes and the domestic monetary policy changes, more and more South Korean investors are starting to put their money into the crypto market and show high enthusiasm. In the past 24 hours, retail transactions in the South Korean crypto market have surged to $18 billion, the second highest level this year, surpassing the $14 billion traded in local stock markets, according to a report released by 10x Research on Dec. 3.
Behind this growth, South Korea's elderly people have also become an important player in the local crypto market. According to Herald Economy, the number of Upbit and Bithumb, the number of accounts over 60 reached 77. [] 570,000 (as of the end of September), up 30. [] 4% from the end of 2021. Users of this age group hold 6. 7,609 trillion won of cryptocurrency assets, with an average investment of about 8.72 million won ($6,173), the highest among all age groups. Meanwhile, demand deposits at the five largest Korean banks were 592. 67 trillion won, down 26. 95 trillion won (about $19.1 bn) from the end of June, the lowest since January this year.
In the choice of investment targets, the volatile counterfeit coin has become a popular choice for South Korean investors. Take Upbit data as an example, among the top 10 assets in the past 24 hours, in addition to Bitcoin, Ethereum and stablecoin, XRP, DOGE, IOTA, and HBAR also topped the top.
In addition, the South Korean government is also actively promoting the development of its crypto market at the policy level. For example, the Korean Congress has reached an agreement to delay the implementation of the encryption tax until 2027, which is the third time since the tax was first proposed in 2020; The Korean government has formulated a plan to gradually allow enterprises to open legal currency accounts for virtual assets, first allowing the central government departments, local governments, public institutions, universities and other non-profit accounts (first stage); Simon Kim, CEO of Hashed Korea, s largest cryptocurrency venture capital firm, disclosed that the Korean government may soon allow the country to issue currency and open institutions to invest in cryptocurrencies. But at the same time, South Korea is also tightening the supervision of the crypto market, including expanding the scope of the cryptocurrency price manipulation investigation to individual investors, and the chairman of the FSC announced that he will take strong measures to prevent virtual assets from becoming "loopholes" in the anti-money laundering system.