North Korea suddenly destroyed the North-South Korean railway line this morning, escalating tensions between the two countries. If a war were to occur, would South Korea, known for its “crazy cryptocurrency trading,” affect the price of Bitcoin and other cryptocurrencies?
Background:
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The North-South Korean issue has always been a focus of international attention, and any movement between the two countries will sound the global security alarm. However, North Korea suddenly destroyed the railway line connecting North and South Korea early this morning, further escalating tensions.
According to the report by Yonhap News Agency, the South Korean Joint Chiefs of Staff announced today that North Korea has destroyed parts of the Gyeongui Line and Donghae Line railways that connect North and South Korea, cutting off land transportation between the two sides. After announcing strengthened vigilance and monitoring, the South Korean military immediately responded with fire south of the Military Demarcation Line (MDL):
Landmines have been buried since the end of last year
According to the report by Central News Agency, the North Korean military announced through official media on the 9th that it would completely cut off land transportation between the two Koreas starting from that day to maintain a solid defense posture. The land routes connecting the two Koreas mainly include the Donghae Line and Gyeongui Line railways, Arrowhead High Ground Road, and the Joint Security Area (JSA) connecting roads.
The South Korean Joint Chiefs of Staff also mentioned in a press conference yesterday that the South Korean military has discovered that North Korea has set up fences along the routes and conducted blasting operations behind the fences, expecting to destroy the railways in the coming days.
According to intelligence obtained by the South Korean military, North Korea began burying landmines around the land routes connecting the two Koreas at the end of last year, and has been gradually removing streetlights, railway facilities, and nearby buildings.
Escalation of conflict: Will the cryptocurrency market skyrocket or plummet?
After the escalation of conflict between North and South Korea, the world is concerned about whether war will further occur between the two countries. However, some people are also worried about whether South Korea, famous for its “crazy cryptocurrency trading,” will be affected by the conflict, leading to “selling off” or “continuously buying” cryptocurrencies. In response to this, DooWoo analyzes the following factors:
War:
Wars usually lead to market uncertainty and panic. As a well-known country for cryptocurrency trading and one of the major cryptocurrency markets globally, South Korean investors’ panic may result in massive selling. Looking back at previous regional conflicts such as the Russo-Ukrainian War and the Israeli-Palestinian conflict, the probability of market decline is very high.
Additionally, if there are further damages to local buildings and personnel, the extent of selling may become more apparent. Most Korean investors trade cryptocurrencies using centralized exchanges such as Upbit and Bithumb. In this case, risks such as public runs, inability to withdraw, and exchange exit may increase public fears, leading to a terrifying wave of selling in the market.
Hedging mentality:
Another scenario is that Korean citizens and even global investors will truly view Bitcoin as “digital gold.” In the event of a war, people may purchase Bitcoin or gold as hedge tools, causing the price of Bitcoin to rise.
Furthermore, during a war, the Korean stock market and the Korean won exchange rate may decline. Korean investors may convert some of their assets into Bitcoin, further driving up its price.
However, some may question the low adoption rate of cold wallets in Korea. If local centralized exchanges shut down, how will Korean users store their coins? The author reminds that Korea can also use global exchanges such as Binance and Bybit.
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