As a seasoned crypto investor with a keen eye for global market dynamics, I’ve witnessed my fair share of financial turbulence across various continents. The current political unrest in South Korea is a stark reminder of how interconnected our global markets truly are.
The persistent political unrest in South Korea has caused waves throughout their economic sector, particularly in their currency market. The South Korean won has plunged to record lows against the U.S. dollar not seen since March 2009.
This devaluation is reflected in the Bitcoin Kimchi Premium, a metric showing the gap between BTC’s price in South Korea and other countries. On-chain data from CryptoQuant reveals that local investors spend as much as 3% more to buy BTC than global crypto users.
South Korean Political Troubles
Jeff Park, head of Alpha Strategies at Bitwise, offered insights about the current political turmoil in South Korea. He pointed out that legislators recently submitted a motion to remove Prime Minister and interim president Han Duck-soo from office. This action follows closely on the heels of the parliament’s impeachment of President Yoon Suk-yeol, who has been leading South Korea since May 2022.
The president’s removal occurred following his attempt to establish military rule in the nation to safeguard it against “anti-government” factions. Implementing martial law means transferring power from civilians to the military. This regime temporarily suspends citizens’ rights to a free press and assembly, reduces the influence of government bodies and judicial systems.
As a researcher, I am bringing attention to the impact of the current political upheaval on the democratic world. In a recent publication, a Bitwise executive articulated their observations on this matter.
The employment of impeachment for political purposes alongside claims of foreign meddling in elections, highlights the vulnerability of democratic systems under the influence of misinformation. This isn’t merely a Korean concern; it serves as a red flag for democracies everywhere.
Impact on Bitcoin Kimchi Premium
News about South Korea’s acting president’s impeachment triggered the won’s drastic devaluation.
In South Korea, crypto asset prices tend to be more expensive than on international trading platforms, largely due to strict capital control rules enforced by regulators. As of this writing, Bitcoin was trading at approximately 144,450,000 won (around $98,000) on Upbit, while it was only $95,100 on Coinbase in the United States.
From my observations, it appears that surges in the Bitcoin Kimchi Premium tend to suggest a bullish sentiment among cryptocurrency traders on South Korean exchanges, historically speaking.
As a researcher, I’ve observed an intriguing trend: Amidst widening price disparities, there has been a swift influx of local investments into dollar-based assets, such as Bitcoin, serving as a refuge from the turbulent Korean Won.
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2024-12-27 21:18