Here’s why crypto prices had a brief flash crash in South Korea

Crypto prices fell sharply in South Korea as the local currency fell to record lows.

Bitcoin (BTC) price fell to 88,197,000 KRW, its lowest level since October 5, before rising to 132,000,000 KRW. The cryptocurrency is down almost 40% from its high this year.

A similar price movement occurred in other altcoins. Ethereum (ETH) fell to 4,210,630 KRW, its lowest level since November 9. Similarly, Ripple (XRP), Stellar Lumens and Solana (SOL) also experienced double-digit declines.

Bitcoin price fell in South Korea and then recovered | source: crypto.news

This collapse followed a political crisis in South Korea that caused the South Korean won to fall to a record low. The won has fallen more than 13% this year, making it one of the worst-performing Asian currencies.

The unrest was triggered by President Yoon Suk Yeol’s decision to declare emergency martial law. He attributed the move to the opposition party, accusing it of having ties to North Korea. Yoon’s statement is as follows:

“I declare martial law to protect the Free Republic of Korea from the threat of North Korean communist forces, to eliminate the vile pro-North Korean anti-state forces that are plundering the freedom and happiness of our people, and to preserve the free constitutional order. order.”

Therefore, as the political crisis escalated, Bitcoin and other altcoins lost value as many investors tried to liquidate their holdings. In most periods, investors often become fearful when a major event occurs.

For example, similar sell-offs occurred at the beginning of the war in Ukraine and the COVID-19 pandemic, followed by recoveries as investors adapted to new conditions. This pattern likely explains the recovery seen in BTC and altcoins after the initial decline.

Additionally, cryptocurrencies remain strong fundamentals and regulatory developments are expected to improve in the United States.