South Korea’s recent implementation of martial law has sent the country’s crypto market into a frenzy, resulting in an unprecedented spike in trading volume. In the 24 hours leading up to 10:30 AM EST on December 4, the combined spot trading volume across South Korea’s five major crypto exchanges hit a record $34.2 billion, according to data from CoinMarketCap.
This represents a nearly 50% surge in trading volume compared to the previous high of $18 billion set on December 2, which had already surpassed stock market volumes by 22%. The sharp increase in activity is believed to have been triggered by the political unrest following the imposition of martial law by President Yoon Suk-yeol.
Although the martial law, which banned protests and placed the media under government control, was lifted after just six hours, it caused widespread panic. Local traders rushed to liquidate their holdings, pushing crypto prices down to around 88 million won for Bitcoin. This chaotic sell-off led to site outages on some exchanges due to the overwhelming surge in trading activity.
Upbit, South Korea’s largest exchange, saw the bulk of the trading activity, contributing $27.25 billion of the total crypto spot trading volume. Bithumb followed in second place, recording more than $6.14 billion in trades. Other exchanges, such as Coinone, Korbit, and Gopax, saw volumes of $531 million, $192 million, and $9 million, respectively.
The surge in crypto trading volume coincided with the implementation of martial law on December 3 at 11:00 PM KST. This emergency decree was enacted by President Yoon as a measure to protect the country from “North Korea’s communist forces” and to eliminate “anti-state elements.” However, many believe it was a politically motivated move to quell domestic unrest and stave off pressure that could lead to his impeachment.
Crypto Prices Plunge Amid Political Unrest
The political crisis that followed the announcement of martial law contributed to a significant drop in cryptocurrency prices. South Korean traders scrambled to liquidate their holdings, causing Bitcoin to fall to 88 million won — its lowest price since October 5. Ethereum also plunged to 4.2 million won, while altcoins like XRP, Stellar (XLM), and Solana (SOL) saw even more dramatic losses, some of them dropping by double digits.
This sudden market downturn mirrors sell-offs observed during other global crises, such as the COVID-19 pandemic and the outbreak of the Ukraine war. Investors, fearing instability and economic uncertainty, rushed to liquidate their assets, pushing prices lower.
Exchanges Struggle with Surge in Traffic
The massive increase in trading volume overwhelmed local exchanges, with some experiencing technical difficulties and temporary outages as traders scrambled to react to the volatile market conditions. The intense activity, combined with the political upheaval, made for a volatile day in the crypto market, highlighting how external events can significantly impact trading behavior in the digital asset space.
As South Korea navigates the aftermath of the martial law crisis, crypto traders are closely watching how the situation unfolds. The sudden surge in trading volume underscores the growing importance of cryptocurrencies as an alternative asset class in times of political and economic uncertainty.