XRP Takes Center Stage in South Korea
People frequently gravitate to Bitcoin or stablecoins like USDT when political and economic unrest occurs. However, South Korea is defying convention. Cryptocurrency traders in the nation are turning to XRP rather than Bitcoin as demonstrations against President Yoon Suk Yeol get more intense. Trading volumes show this change. According to Zhong Yang Chan, head of research at CoinGecko, XRP has tripled the value of Bitcoin on UPbit, the biggest crypto exchange in South Korea, in the last day.
Source: UPbit
When the president imposed martial law, an extraordinary step in a nation with a long history of democracy, the political climate worsened.
The political situation worsened when the president declared martial law, which is an unusual move in a country with a long tradition of democracy. There have been calls for impeachment as a result of the considerable indignation this decision has provoked. The turmoil severely damaged the South Korean won, causing it to plummet. Crypto markets followed suit, with XRP losing half of its value locally and Bitcoin plummeting 33%. Despite these precipitous declines, the unrest gave astute traders the chance to profit from price differences between domestic and foreign markets.
Due to South Korea’s increasing political and economic unrest, investors are preparing for tremendous volatility. Ian Cho, one of the founders of ITAM Games, thinks the volume of cryptocurrency trade in the nation will hit a record high. The market is ready for such big activity because of months of political stalemate and a declining win. The currency is down 7% so far this year and recently fell to a two-year low.
During the turmoil, Upbit has become a prominent participant. The exchange’s market share increased from 4% a few months ago to around 11%, according to data from Kaiko. Even the Kospi stock index is seeing a decline in trading volume compared to Upbit and other local markets. In November, the average value of cryptocurrency trading on local platforms was $9.4 billion, while the Kospi index saw $7 billion.
Despite the increased activity, Bitcoin hasn’t seen significant outflows from South Korean exchanges. This signals that investors may not be moving their funds out of the country, even in this uncertain environment. However, the weakened won is causing headaches for many. A poor exchange rate often pushes more investors toward crypto, but this time, the plunge in crypto prices is also linked to technical issues. Centralized exchanges struggled to handle the surge in traffic during the crisis.
South Korea’s crypto market is seeing a rare reversal. Historically, Bitcoin and other cryptocurrencies trade at a higher price locally, a phenomenon known as the kimchi premium. Now, this premium has turned negative. Analysts suggest this reflects Korean investors’ hesitation to treat crypto as a safe haven during instability. Instead, many still view it as a risk-on asset.
The political and economic unrest in South Korea is putting the crypto market’s resiliency to the test. The performance of Bitcoin highlights the difficulties facing digital assets in the nation, even though XRP has drawn traders’ attention. It’s still unclear if cryptocurrency will establish itself as a strong substitute for conventional assets. As the market continues to defy expectations, the emphasis is currently on controlling the risks and navigating the volatility.
