North Korea suddenly destroyed the North-South Korean railway line this morning, causing tensions between the two countries to escalate once again. If a war were to break out, will South Korea, famous 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. Any movement between the two countries will sound the alarm for global security. However, North Korea suddenly destroyed the railway line connecting North and South Korea this morning, causing tensions to escalate once again.
According to the report from 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 the two Koreas, cutting off land transportation between the two sides. After announcing enhanced vigilance and surveillance, the South Korean military immediately responded with gunfire south of the Military Demarcation Line (MDL).
According to a report from the 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 to maintain a stable defensive posture. The land routes connecting the two Koreas mainly include the Donghae Line, Gyeongui Line, Arrowhead Hill Highway, and the roads in the Joint Security Area (JSA).
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 is conducting blasting operations behind the fences, expecting to destroy the railway in the coming days.
According to intelligence obtained by the South Korean military, North Korea began planting landmines around the land routes connecting the two Koreas at the end of last year, and has been gradually dismantling streetlights, railway facilities, and nearby buildings.
With the escalation of the conflict between North and South Korea, the world is concerned about whether there will be further war. However, some people are worried about whether South Korea, known for its “crazy cryptocurrency trading,” will be affected by the conflict and “sell off” or “continue to buy” cryptocurrencies. In response, Dynamic Zone provides the following analysis based on the following factors:
War:
War usually triggers market uncertainty and panic. As a well-known cryptocurrency trading country and one of the major cryptocurrency markets in the world, South Korea’s investors’ panic may lead to large-scale sell-offs. Looking back at past regional conflicts such as the Ukraine-Russia war and the Israel-Palestine conflict, the probability of market decline is very high.
Furthermore, if there is further damage to local buildings and personnel, the degree of sell-off is likely to be more pronounced. Most of the Korean investors trade cryptocurrencies using centralized exchanges such as Upbit and Bithumb. In this case, the risks of people rushing to withdraw funds and exchanges running away will increase people’s fear, and the market may face a more terrifying sell-off.
Hedging:
Another scenario is that Korean people, and even global investors, will truly regard Bitcoin as “digital gold.” In the event of a war, people will buy Bitcoin or gold as a hedge tool, causing the price of Bitcoin to rise.
In addition, during the war, the Korean stock market and the exchange rate of the Korean won may decline. Korean investors may convert some of their assets into Bitcoin, further driving up its price.
However, some may wonder about the low adoption rate of cold wallets in Korea. If local centralized exchanges in Korea shut down, how can Korean users store their cryptocurrencies? The author reminds that Korea can also use global exchanges such as Binance and Bybit.
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