According to data from CryptoQuant, the premium of Bitcoin trading prices on South Korean cryptocurrency exchanges compared to the global market has reached 10.32%. This phenomenon, known as the “kimchi premium” in the cryptocurrency community, has reached its highest level in 27 months.
The term “kimchi premium” refers to the difference in cryptocurrency prices between South Korea and other places. The main reasons for this situation are as follows:
1. Local regulations in South Korea do not allow foreign investors to trade on Korean exchanges.
2. The country’s trading is primarily denominated in Korean won.
3. Korean investors who buy large amounts of cryptocurrency from foreign exchanges for arbitrage may be penalized under the country’s Foreign Exchange Transactions Act.
These factors contribute to the significant price difference between Korean cryptocurrency and the global market when there is a surge in buying pressure. At the time of writing this article, the Bitcoin-Korean won trading pair on Upbit had a trading price of approximately 93,146,000 Korean won, which is equivalent to $70,000.
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