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Bitcoin and XRP plunged on South Korean crypto exchanges yesterday after President Yoon Suk Yeol declared martial law, creating arbitrage opportunities for savvy investors.
Despite the martial law order only lasting a few hours, panic selling due to the political turbulence was enough to push Bitcoin’s value down 33% to $61,200 on South Korean exchange Upbit. XRP also shed more than half of its value during the same period.
Martial Law Declaration Forces Kimchi Premium To An All-Time Low
South Korean exchanges are often watched for spot arbitrage opportunities. Traders try to capitalize on the Kimchi premium, which refers to the difference in crypto prices between South Korean and US exchanges.
South Korea’s financial markets are in chaos because of the president’s political show. https://t.co/u2NTEpkA7E pic.twitter.com/OvypvDwLYW
— Ki Young Ju (@ki_young_ju) December 3, 2024
Korean-based CryptoQuant CEO Ki Young Ju commented on the political scuffle, and said in a Dec. 3 X post that the Bitcoin kimchi premium hit an all-time low.
After Korean parliament members nullified the president’s martial law declaration within hours, the Bitcoin Kimchi premium returned “back to normal,” Young Ju said in a follow-up X post.
Crypto Whales Capitalize On Massive Price Differences
Some crypto whales took advantage of the Kimchi premium yesterday. On-chain analytics firm Lookonchain noted that many large crypto holders transferred substantial amounts of Tether (USDT) to Upbit. Just 1 hour after the president’s declaration, whales sent over $163 million to the South Korean exchange, according to Lookonchain.
The #Korean crypto market has plummeted following South #Korea’s declaration of "martial law."
Many whales transferred large amounts of $USDT to #Upbit, likely aiming for bottom-fishing opportunities.
Within 1 hour after the declaration of "martial law", over 163M $USDT flowed… pic.twitter.com/ZnCiIrvoMj
— Lookonchain (@lookonchain) December 3, 2024
The BTC/KRW pair stands at 135,300,000 on Upbit as of 2:50 a.m. EST. In dollar terms, the leading crypto is trading at $95,735,44 on Upbit, while CoinMarketCap data shows the crypto’s value is at $96,567.15.
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