South Koreans are paying a 3% premium to buy Bitcoin as the local currency plunges to a 15-year low following the impeachment of the acting president.
Political Turmoil and Currency Collapse Drive Bitcoin Premium
The South Korean won recently slumped to its lowest level against the U.S. dollar since March 2009. This significant devaluation comes in the wake of heightened political instability as the country’s parliament voted to impeach Prime Minister and acting president Han Duck-soo, just weeks after impeaching President Yoon Suk Yeol.
This political upheaval has shaken public trust in South Korea’s National Election Commission (NEC), fueling concerns of election fraud and foreign intervention. Jeff Park, Head of Alpha Strategies at Bitwise, remarked on X (formerly Twitter), “The erosion of trust due to alleged election interference underscores the fragility of democracy worldwide.”
Bitcoin as a Safe Haven
Amid the uncertainty, South Korean citizens are turning to cryptocurrencies as a hedge against the falling value of the won. CryptoQuant data reveals that South Koreans are paying a 3% premium compared to U.S. traders to purchase Bitcoin (BTC). Currently priced at 145,000,000 won ($98,600) on South Korea’s largest exchange, Upbit, Bitcoin trades noticeably higher than on U.S.-based platforms like Coinbase, where its value is approximately $96,700.
The “Kimchi Premium,” a term used to describe Bitcoin’s price discrepancy in South Korea compared to global rates, highlights the increasing demand for decentralized assets amidst turmoil.
Global Implications of South Korea’s Crisis
While the crisis is deeply rooted in South Korea, experts warn that its implications extend beyond its borders. Jeff Park adds, “The use of impeachment as a political weapon, combined with claims of misinformation and foreign influence, serves as a cautionary tale for democracies worldwide.”
The intersection of political instability, currency volatility, and a heightened appetite for Bitcoin paints a vivid picture of how financial systems can react in crises.
As South Korea confronts its mounting challenges, the rise in Bitcoin demand underscores a growing trend—citizens across the globe are gravitating toward cryptocurrencies as a viable alternative to traditional financial systems in times of unease. The unfolding developments serve as a clear reminder of Bitcoin’s role as both a financial and political barometer.