South Korea’s martial law which lasted for six hours created panic in the crypto market pushing trading volumes in the country to a record $34 billion.
South Korea’s President Yoon enacted an emergency Martial law in the country on December 3 citing the necessity to protect the country from North Korean communist forces.
The news threw the country into turmoil sparking political unrest and clashes with law enforcement.
On the crypto side of things, Crypto holders in the country were rushing to sell their crypto holdings on local exchanges leading to a surge in trading volume.
CoinMarketCap data revealed that the combined crypto spot trading volume from Upbit, Bithumb, Coinone, Korbit, and Gopax reached a volume of $34.2 billion in the 24 hours following the development.
Crypto trading volume in the Asian country surpassed stock trading volume by 22%. This was a direct result of the unrest in the country caused by crypto holders panicking to sell their assets. The massive surge resulted in various crypto exchanges in the country experiencing a downtime.
Upbit, the biggest exchange in the country had the largest share of trading volume for the day receiving about $27.25 billion worth of crypto.
Bithumb came in second with a spot trading volume of more than $6.14 billion in the past 24 hours of trading.
Other smaller exchanges like Coinone accumulated a trading volume of more than $531 million in the past 24 hours followed by Korbit with $192 million worth of crypto trading volume.
Gopax recorded the smallest inflow for the day with nearly $9 million traded on the platform.
Effect of the South Korean Martial Law on Crypto Assets
The crypto market is very sensitive to global events that create uncertainty and unrest. This is because crypto holders are in the habit of selling their assets in times of uncertainty and unrest creating selling pressure.
The South Korean martial law was no different as crypto assets reacted to the unrest that followed the event.
Bitcoin and Ethereum dipped slightly following the development while other altcoins like Ripple, Stellar Lumens, and Solana plunged by double digits.
Similar drops were recorded at the Onset of the Ukraine war and the COVID-19 pandemic.
What to Know
- Selling pressure is created in the market when there is an increase in crypto holders trying to sell their crypto assets. This is usually influenced by a bearish sentiment which could range from an adverse geo-political event or onchain activity. Selling pressure usually leads to a price drop in crypto assets.
- The German government selling off the 50,000 BTC it seized from movie piracy is a good example of an adverse on-chain activity creating selling pressure.