• South Korea’s political unrest and martial law declaration triggered a flash crash in cryptocurrencies.
• XRP saw a dramatic 54% drop on UpBit, struggling to recover compared to Bitcoin’s quicker rebound.
• South Korea’s crypto market, a major player in global XRP trading, reportedly hindered XRP’s ascent to $3

XRP’s price crash in South Korea highlights the crypto market’s sensitivity to political events. Last Tuesday, the president’s declaration of martial law triggered a flash crash across global markets, hitting Bitcoin (BTC) and XRP hard. According to analytics platform Kaiko, XRP prices on South Korea’s UpBit exchange fell by 54%, struggling to recover compared to Bitcoin’s quicker rebound.

Bitcoin Flash Crash

On South Korea’s main exchanges, UpBit and Bithumb, the BTC-KRW pair fell sharply. UpBit had the steepest drop, with Bitcoin prices plunging 30% to 89 million Korean Won (about $63,000).

This panic initially pushed prices down, but eventually, net buying activity stabilized the BTC-KRW pairs. The market showed resilience and regained its composure.

XRP Suffers the Most Severe Decline

While Bitcoin’s recovery was relatively quick, XRP’s drop was more severe. On UpBit, XRP prices fell by 54%, the decline extending into the following day. Unlike Bitcoin, XRP-KRW prices struggled to return to pre-crash levels. 

According to Kaiko’s tick trade data, although buying pressure intensified on Tuesday evening, the recovery was slower for XRP.

XRP’s Role in South Korea’s Crypto Market

South Korea’s crypto market is a major player in global XRP trading. It accounts for some of the highest transaction volumes. Local exchanges often see higher trading volumes for XRP than Binance, the world’s largest crypto platform.

For instance, data from CoinMarketCap shows that UpBit, the largest exchange in South Korea, sees $2.85 billion in 24-hour XRP trading volume, while Binance ranks second at $2.4 billion. In this context, South Korea holds significant weight in XRP’s market performance. 

Analyst Dom suggests that, had it not been for the political turmoil, XRP could have reached $3 last week. He used this example to argue that despite the impact of South Korea’s market, XRP’s price on the global stage remained high, countering critics who believed the cryptocurrency’s rally was nearing its peak, stating:

“Martial law couldn’t even keep XRP down…”

The Impact of Regulatory Barriers

South Korea’s strict regulations played a two-sided role during the crash. On one hand, it restricted cross-border arbitrage, which made price differences on local exchanges worse. This has historically led to the “Kimchi premium” where cryptocurrencies trade at a premium—or sometimes a discount—on South Korean platforms like UpBit and Bithumb. 

While on the other hand, these regulations helped contain the crash’s effects and prevented it from spreading across global markets.