KRW Whales Accumulate USDT At 1998 IMF Crisis Level, Market Crash Ahead?

South Korea appeared to be moving towards an economic crisis, especially as the KRW whales shifted their focus towards the USDT stablecoin. Notably, with the South Korean won (KRW) hitting a 15-year low against the dollar, concerns about a looming financial crisis have intensified. CryptoQuant CEO Ki Young Ju likened the situation to the 1998 IMF crisis, sparking fears of a potential market collapse.

KRW Whales Shifts Focus To USDT Stablecoin

The South Korean won recently fell to its weakest level in 15 years, trading at 1,448.9 per dollar. Amid this, USDT commands a 3% premium against the official exchange rate, unofficially valuing it at 1,559 KRW on Upbit, CryptoQuant CEO and founder Ki Young Ju reported.

He revealed on X that this premium mirrors exchange rates during the 1998 IMF crisis, warning of severe implications for the economy. Besides, Ki said that amid this topsy-turvy scenario, the KRW whales are now accumulating USDT.

Meanwhile, domestic assets have lost their appeal, with wealthy individuals moving capital abroad, he noted. According to Ki, the government’s rigid measures to defend the currency are exacerbating the situation. He argued that fostering industries and reducing regulations would better attract investments and stabilize the economy.

On the other hand, South Korea’s finance minister promised bold interventions to stabilize financial markets. Measures include expanding foreign exchange swap lines and allowing flexible management of forex transactions by local banks. However, these steps have not fully eased market tensions, as evidenced by the stock market performance of the country. The benchmark KOSPI index dropped nearly 2%.

South Korea Economic Slowdown Fuels Concern

South Korea is likely moving towards a potential market crash ahead, as evidenced by the focus shift of the KRW whales towards USDT. According to a Reuters report, the Bank of Korea (BOK) predicts a grim future for South Korea’s growth.

Its potential economic growth rate, now around 2%, could drop below 1% by the 2040s due to low innovation and resource inefficiency. The central bank emphasized that reforms are crucial to reversing this trend. These challenges are compounded by political instability, including the aftermath of President Yoon Suk Yeol’s controversial martial law order.

Global macroeconomic factors, such as the US Federal Reserve’s cautious stance on interest rate cuts, also pressure the won. Notably, the KRW fell to its lowest level today after the US Fed announced a 25bps rate cut on December 18. In addition, Jerome Powell’s speech also indicates a hawkish move ahead by the US central bank, which has further weighed on the sentiments.

Meanwhile, the BOK urged structural reforms, advocating for innovation ecosystems, balanced regional development, and work-life balance policies to boost growth. Yet, with capital outflows accelerating and domestic confidence waning, the road to recovery seems difficult.

Notably, South Korea’s financial turbulence highlights the urgent need for strategic reforms. Without decisive action, the nation risks sliding into a market crash like the 1998 meltdown, leaving both markets and policymakers on edge.

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Rupam Roy

Rupam is a seasoned professional with three years of experience in the financial market, where he has developed a reputation as a meticulous research analyst and insightful journalist. He thrives on exploring the dynamic nuances of the financial landscape. Currently serving as a sub-editor at Coingape, Rupam’s expertise extends beyond conventional boundaries. His role involves breaking stories, analyzing AI-related developments, providing real-time updates on the crypto market, and presenting insightful economic news.
Rupam’s career is characterized by a deep passion for unraveling the complexities of finance and delivering impactful stories that resonate with a diverse audience.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.