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%, reaching the highest level in 27 months, a phenomenon known as the “Kimchi premium” within the cryptocurrency community.
The “Kimchi premium” is a term referring to the difference in cryptocurrency prices between South Korea and other regions. The main factors contributing to this situation are as follows:
1. Local regulations in South Korea do not allow foreign investors to trade on Korean exchanges.
2. The primary currency for trading in the country is the Korean won.
3. Korean investors who purchase large amounts of cryptocurrency from foreign exchanges for arbitrage may be penalized under the country’s Foreign Exchange Transaction Act.
These factors result in a significant price difference between South Korean cryptocurrency markets and the global market, especially during periods of high demand. At the time of writing, the Bitcoin-Korean won trading pair on Upbit is priced at approximately 93,146,000 Korean won, equivalent to $70,000.
