When political chaos hits, investors actually dump Bitcoin instead of treating it like a safe haven.
March 19, 2026
Original Paper
<p>Do People Truly See Bitcoin as a Safe Asset, Deep Down? A Short Example from Extreme Political Uncertainty</p>
SSRN · 6306979
The Takeaway
During the 2024 martial law declaration in South Korea, Bitcoin prices crashed locally despite stable global prices. This provides rare evidence that when extreme political risk becomes real and immediate, investors treat Bitcoin as a high-risk asset to be liquidated rather than a hedge against instability.
From the abstract
The sudden declaration of martial law in South Korea in 2024 generated extreme political uncertainty for several hours. Using minute-level data from local cryptocurrency markets, we show that Bitcoin prices collapsed sharply, accompanied by surging trading volume and widened bid-ask spreads, despite uninterrupted information flows and stable global prices. The episode provides rare evidence that, when extreme political risk becomes real and salient, investors do not treat Bitcoin as a safe haven