South Korea’s cryptocurrency markets remain volatile following recent political turmoil triggered by President Yoon Suk-yeol’s controversial declaration of martial law that was invalidated after just six hours.
Lawmakers and citizens outraged by the move are now pushing for Yoon's removal, a development that analysts warn could increase market instability.
On Tuesday night, Yoon declared martial law to stem growing criticism from his opposition party. The decision was met with a swift backlash, even from within Yoon's People Power Party. According to MBC News, a coalition of 191 lawmakers today launched impeachment proceedings, with a vote expected later this week.
The political chaos had an immediate impact on South Korea’s crypto markets, with leading exchanges Upbit and Bithumb experiencing system outages due to traffic surges, while cryptocurrency prices saw a sharp drop. While prices have since recovered, analysts warn that further developments, including a possible impeachment, could continue the volatility.
“New developments such as impeachment proceedings could cause volatility, but the impact is likely to be limited to the domestic market and short-lived,” said Min Jung, research analyst at Presto Research.
However, others warn of broader implications. DeSpread Research President Seunghwa Lee noted that political instability in South Korea could spill over into global markets, especially for cryptocurrencies that are heavily traded by Korean investors. XRP, a favorite of South Korean traders, fell 15% more than average during the martial law declaration, according to CoinGecko data.
“Given the significant influence of South Korean investors, political events that dampen investor sentiment could have sufficient impact on global markets,” Lee said.
*This is not investment advice.
