Martial Law Debate Under President Yoon: Polymarket Bets on Resignation

- Bitcoin prices on South Korean exchanges dropped over 30% immediately after the martial law announcement - Traders’ anxiety intensified during the martial law period, but market prices recovered after its repeal [Unblock Media] South Korea's cryptocurrency market experienced extreme volatility following President Yoon Suk-yeol's declaration of martial law. Following this announcement, cryptocurrency prices showed a significant disparity compared to the global market. President Yoon declared martial law at 11 PM on Tuesday as a measure to quell "pro-North Korea anti-state forces." This caused temporary turmoil in South Korea's economy, with the value of the won surging against the dollar. For holders of USDT, this situation provided an opportunity for arbitrage in the cryptocurrency market for a brief period. On the exchange Upbit, the price of Bitcoin once dropped to $79,000, while XRP was traded at $1.89. Many users moved to purchase Bitcoin and XRP at these unprecedentedly low prices. During the trading on Tuesday night, Bitcoin prices on South Korean exchanges including Upbit fell by over 30%, whereas the global market saw only a 2% decline. This discrepancy reflected the panic selling by local traders and the sharp rise in the won's exchange rate against the dollar. According to data from Lookonchain, approximately $163 million worth of USDT flowed into Upbit, with many whales placing large USDT orders. Major whales tend to place large orders to profit from market volatility. Such buying activity seems to have been aimed at purchasing assets at a low price amidst market chaos. At around 1 AM on Wednesday, the National Assembly voted to reject the declaration of martial law. Subsequently, the market stabilized with Bitcoin prices recovering to $95,167 and temporarily surpassing $96,000. Political uncertainty has also affected cryptocurrency prediction markets. On Polymarket, a betting pool emerged regarding the likelihood of President Yoon's resignation. Betting amounts tallied up to approximately $963,616, with a 46% probability of resignation currently indicated. Political stability and the cryptocurrency market are becoming increasingly interconnected. Despite regulatory challenges, South Korea's cryptocurrency market has witnessed continuous growing activity from local users this year. According to BeInCrypto, South Korea's daily trading volume increased by 67%, reaching 6 trillion won. However, cryptocurrency exchanges continue to face regulatory hurdles. Financial supervisors pointed out 600,000 potential KYC (Know Your Customer) violations on Upbit, which threatened the exchange's license renewal. Upbit is striving to maintain transparency, but regulatory investigations are increasing user anxiety. Additionally, regulatory authorities have begun investigating Upbit's potential monopoly in the South Korean cryptocurrency market. The exchange is suspected of taking advantage of regulatory loopholes in connection with pump and dump schemes, leading to increased supervision. Approximately 35% of cryptocurrencies traded on various South Korean exchanges have been delisted, with half of these lasting less than two years. Delistings lead to reduced liquidity for inaccessible coins and significant investor losses due to price crashes.