The ongoing political turmoil in South Korea has had a ripple effect on the country’s financial market. The South Korean won has dropped to its lowest value against the United States dollar 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, the Head of Alpha Strategies at Bitwise, shared insights into the present political troubles in South Korea. He explained that the country’s lawmakers recently filed a motion to impeach the Prime Minister and interim president, Han Duck-soo. This comes just two weeks after the parliament impeached President Yoon Suk-yeol, who has ruled the Asian nation since May 2022.

The president’s ousting came after he tried to implement martial law in the country to protect it from “anti-state” forces. Enforcing martial law involves conferring authority from civilians to the military. This rule suspends the civil right to freedom of the press and assembly and downsizes the power of government agencies and the courts.

Highlighting how the ongoing political turmoil concerns global democracies, the Bitwise executive wrote:

“The use of impeachment as a political tool, combined with allegations of foreign election interference, underscores the fragility of democracy in the face of disinformation. This is not just a Korean story; it’s a warning for democracies worldwide.”

Impact on Bitcoin Kimchi Premium

News about South Korea’s acting president’s impeachment triggered the won’s drastic devaluation.

Crypto asset prices are usually higher on South Korean exchanges than on foreign trading platforms, primarily because of the country’s regulators’ stringent capital control policies. At the time of writing, BTC was 144,450,000 won ($98,000) on the South Korean exchange Upbit, compared with $95,100 on the American exchange Coinbase.

Past reports show that an increase in the Bitcoin Kimchi Premium often indicates a bullish streak on South Korean crypto exchanges.

Despite the increased price gap, local investors have rapidly flocked to dollar-denominated assets like BTC as a haven from the struggling won.