South Korea’s so-called kimchi premium for Asian Bitcoin hit 10.32% on Wednesday, the highest in 27 months, according to data from CryptoQuant.
Kimchi Premium is a term that refers to the price difference between domestic and foreign cryptocurrency. Data from CryptoQuant compares the price of Bitcoin in South Korea with the price in the US dollar market.
Cryptocurrency prices in Korea differ from overseas prices due to several unique factors in the domestic cryptocurrency market. Domestic regulations essentially block foreign investors from trading on Korean exchanges. Korean investors who purchase large amounts of cryptocurrency on foreign exchange for arbitrage may be punished under the country’s foreign exchange transaction laws.
Because domestic cryptocurrency supply is limited, price gaps often widen due to surges in local demand. Rising premiums could mean stronger buying pressure from South Korean retail investors, CryptoQuant data shows.
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Bitcoin has since given back some of its gains and is trading around $65,800 in Asia on Thursday afternoon, according to The Block’s price page.
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About the author
Danny Park is The Block’s East Asia reporter, writing about topics including Web3 development and cryptocurrency regulation in the region. He previously worked as a reporter for Forkast.News, where he actively covered the fall of Terra-Luna and FTX. Based in Seoul, Danny previously produced written and video content for media companies in Korea, Hong Kong and China. He holds a Bachelor’s degree in Journalism and Business Marketing from the University of Hong Kong.