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Key Takeaways

Bitcoin plunged over 30% on Upbit following South Korea’s martial law declaration.
Fear and uncertainty have gripped the market, leading to widespread selling and a loss of investor confidence.

Bitcoin’s price plunged more than 30% to $62,000 on Upbit within the last hour, following South Korean President Yoon Suk Yeol’s declaration of “emergency martial law,” according to data tracked by TradingView. The sharp decline was observed in the Korean won (KRW) trading pair.

Bitcoin has since recovered above $89,000 on Upbit, creating a $4,000 arbitrage gap compared to global markets. The flagship digital asset dropped from $96,000 to $93,600 on global exchanges following the announcement.

On December 3, 2024, South Korean President Yoon Suk Yeol declared emergency martial law during a televised address. He claimed that the decision was necessary to protect the freedoms and security of citizens under threat from North Korea.

The declared martial law is also aimed at restoring order in light of what he termed “chaos” caused by the opposition-controlled parliament.

“I declare martial law to protect the free Republic of Korea from the threat of North Korean communist forces, to eradicate the despicable pro-North Korean anti-state forces that are plundering the freedom and happiness of our people,” President Yoon said in a televised address, “and to protect the free constitutional order.”

Martial law is a drastic response by a government in times of emergency, wherein military personnel take charge to maintain stability and security. This often results in the enforcement of curfews, limitations on personal movement, and curtailments of various civil freedoms.

Immediately after President Yoon’s declaration, 190 lawmakers voted to urge him to lift martial law. The vote occurred during an emergency session of the National Assembly, where opposition leaders and even members of Yoon’s party expressed strong disapproval of the martial law declaration.

South Korea, one of the world’s largest crypto markets with trading volumes exceeding its stock market, saw major disruptions across exchanges briefly after President Yoon’s announcement. Upbit and Bithumb experienced trading downtime due to increased traffic at the time of reporting.

The announcement caused increased volatility in the crypto market. Many other trading pairs beyond BTC/KRW, such as XRP/KRW, DOGE/KRW, and ADA/KRW were also affected.