Financial Markets in Turmoil: Global Cryptocurrency Market Plummets Amid Political Uncertainty and Regulatory Pressures
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XRP Tanks Amid South Korea’s Political Crisis and Regulatory Pressures
South Korea’s recent political crisis has sent shockwaves through the global financial markets, with ripple effects being felt across various asset classes. The cryptocurrency market is no exception, as XRP takes a significant hit amid the uncertainty.
As of late 2024, XRP has dropped by 2% in the past 24 hours, aligning with a broader market downturn. The token’s performance is closely tied to events unfolding in South Korea, where an arrest warrant was issued against impeached President Yoon Suk Yeol on December 3rd. The unprecedented move followed Yoon’s attempt to impose martial law, which was swiftly overturned by parliament.
The fallout from the political tumult has led to a dramatic plunge in South Korea’s currency, with the won trading below 1,470 per dollar and losing over 12% of its value since January 2023. This decline marks it as the weakest currency in emerging Asia. Furthermore, the Bank of Korea reduced interest rates to 3% in December, but this measure failed to stabilize the currency amid concerns about the country’s economic health.
It is no surprise that XRP, a cryptocurrency favored by South Korean traders, has been directly impacted by these events. As the token fell below 3,000 won on Upbit, it marks a 12% drop over the past week. Moreover, the global cryptocurrency market has mirrored this downturn, with the total market capitalization falling by 1.3% to $3.22 trillion.
On top of these political pressures, XRP is battling dual regulatory headwinds emanating from the U.S. Securities and Exchange Commission (SEC). The case revolves around the question whether XRP constitutes a security, as a January 15th, 2025 deadline for the SEC’s next filing draws near. While supporters remain optimistic that new SEC Chair Paul Atkins will adopt a more crypto-friendly stance, the ongoing lawsuit casts a shadow over XRP’s performance.
In December, trading volume dropped sharply, plummeting from $37.5 billion to just $2.5 billion. This decline occurred despite an earlier bullish start to the month, where XRP outperformed its peers Bitcoin and Ethereum with an astonishing 247% annual return.
Source: coinchapter.com
