Tag: South Korea

Why Bitcoin Plummeted to $65K in South Korea

Summary: Bitcoin is having a heck of a great time worldwide except for South Korea as its valuation took a nosedive after a shocking and drastic martial law announcement, leaving traders scrambling as chaos rocked the markets. Here’s what went down and how the market bounced back.

Martial Law Sends Shockwaves

On December 3, Bitcoin prices on South Korea’s Upbit exchange tanked to 92 million won (~$65,000), a staggering $30,000 below global rates. The crash came moments after President Yoon Suk Yeol dropped a bombshell on live TV, declaring martial law to “eliminate anti-state elements.” The drastic announcement was meant to address perceived threats from North Korea but instead triggered financial panic, with crypto markets bearing the brunt of the chaos.

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Liquidity? Poof, It’s Gone

Traders were left in shock as the market spiraled. A crypto analyst, Ltrd, explained the meltdown: “Everyone just dipped. The market had no buyers left.” With liquidity providers pulling out, a 10% price spread appeared, exposing how fragile South Korea’s crypto market really is. Unlike global markets, South Korea’s exchange ecosystem is tightly controlled, making it ridiculously hard for new players to jump in. This made the crash even worse as sell orders piled up, and there weren’t enough buyers to stabilize prices.

The Bounce Back

But here’s the plot twist: South Korea’s parliament wasn’t having it. Just hours later, lawmakers voted unanimously to cancel the martial law order, and President Yoon gave in. The calm returned fast, with Bitcoin prices rebounding to 135 million won (~$95,000) by day’s end. While the market recovered, the episode highlighted how thin liquidity and sudden political moves can shake even a giant like Bitcoin.

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South Korea Pushes Crypto Tax to 2027

Summary: South Korea had planned to take 20% take on crypto but it’s now been delayed to 2027 after rejecting calls to raise the tax threshold. Regulators cite the need for more preparation, giving traders a temporary break from taxation.

Crypto Tax Delayed Again

South Korea still seems indecisive about its crypto policies as it has yet gain hit pause on its crypto tax and for another time pushing the controversial 20% levy to 2027. This isn’t a recent news because Korea took this initiative and planned this all for 2021 and it kept on getting delayed and delayed and we’re talking about its yet another delay. Democratic Party leader Park Chan-dae confirmed both parties’ agreement to delay the bill, with a formal vote set for December 2, 2024.

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Low Threshold Sparks Pushback

There are several speculations that can be made but most the delays kept on happening because of debates over the allocated tax threshold. The delay followed a very heated debate over the tax threshold which is currently set at 2.5 million won ($1,781). The Democratic Party’s attempt to raise it to 50 million won ($35,633) was rejected. Crypto exchanges argued the low threshold would crush trading volumes, leading the government to side with delaying implementation.

The Road Ahead

As mentioned above, this isn’t the first time this policy has been postponed. This same policy has been postponed three times and for over 3 years now with officials still being indecisive over this but discussions around related policies, like inheritance and gift taxes, continue. Traders now have more time before the 20% tax impacts profits, with hopes of further revisions down the line.

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