After South Korean President Yoon Suk-yeol declared martial law on Tuesday, the prices of digital currencies on South Korean cryptocurrency exchanges fluctuated dramatically due to the country facing a parliamentary political deadlock.

Most large digital assets saw a decline on Tuesday, with the benchmark cryptocurrency bitcoin experiencing significant volatility. Since President-elect Trump won the US election, bitcoin has experienced a record-breaking surge, although the token fell short of the expected $100,000 milestone for many. Altcoins like XRP also surged in recent weeks but then retraced.

In contrast, the prices of digital assets on South Korean cryptocurrency exchanges saw a larger decline. It is well known that traders use the so-called 'Kimchi premium' for long-term arbitrage. On Tuesday, the price of bitcoin against the stablecoin Tether on South Korean cryptocurrency exchanges dropped to $71,814.99, while at that time, the average bitcoin price on global exchanges was around $93,600. It is reported that significant funds entered South Korean cryptocurrency exchanges for purchases at that time.

Note: 'Kimchi premium' refers to the price difference between bitcoin on major global exchanges and South Korean exchanges.

Yoon Suk-yeol later stated that he would lift the martial law order. His earlier announcement of martial law shocked the nation, legislators, and investors. He claimed that this was done to prevent the opposition from paralyzing his government amid its political divisions.

Not just bitcoin, earlier South Korea's crypto exchange's altcoin trading prices were generally lower than other exchanges. The famous dogecoin (DOGE) price in South Korea's crypto exchange was once around 34 cents, while the composite price of various large exchanges was 40 cents. XRP has risen significantly in the past few days, with a price of $2.44 in South Korea's crypto exchange, while the composite price of multiple large exchanges was $2.46.

FRNT Financial wrote in a report to clients that, compared to the USA, South Korea's interest in XRP is exceptionally high. 'For example, in the past 24 hours, the total XRP trading volume on Kraken and Coinbase was about $2.76 billion,' the analyst at this digital asset platform wrote in a report on Tuesday. According to FRNT Financial's data, the XRP trading volume in crypto exchanges available only to South Koreans reached $5.5 billion during the same period.

Altcoins like XRP often have poorer liquidity than bitcoin, leading to greater volatility, as bitcoin is primarily used as a store of value. While this volatility has resulted in XRP achieving record gains unseen since the 2021 crypto bubble, it also means that in uncertain markets, these tokens may suffer greater losses than bitcoin.