- Kimchi premium describes the escalated price gap among tokens on South Korean exchanges and contrasts the international average.
- Crypto assets in peninsula are often elevated than that of international averages as foreign investors are barred from utilizing local exchanges.
- As of this writing, Bitcoin was trading at a market value of $31,590.59, up by a nominal 0.19% during previous 24 hours.
Bitcoin Kimchi Got Cold
Kimchi premium of South Korea diminished to about 3.39% on Wednesday after its longest climb since December, 6.28% on Tuesday.
Kimchi premium determines the escalated value gap among tokens on South Korean exchanges and contrast to international average. An escalation in Kimchi premium often means the restricted domestic Bitcoin supply is not able to cope up with soaring demands.
Cryptocurrency values on peninsula are often greater than that of international averages as foreign investors are barred from utilizing domestic exchanges, and acquiring crypto assets in overseas exchanges is a punishable offense.
The brewing crypto interest in South Korea has not only drove domestic Bitcoin prices over $70,000 — an astounding premium over BTC values everywhere else on the globe — but the rumored NYSE public listing of Dunamu, the parent organization of among country’s best cryptocurrency exchanges Upbit, also generated spikes in values of shareholders.
Kimchi 2.0
Kimchi premium phenomenon was observed in South Korea during late 2017, towards tail end of ICO boom, when value of BTC on South Korean exchanges were trading for greater than the rest of the globe.
Aside from country’s love for gambling – in spite of laws that restricts Korean nationals from stepping into domestic casinos — increasingly robust crypto regulations on the neighbor China also gave hands to soaring Bitcoin values on Korean exchanges.
Obstacles laid down by the authorities to curb investors leveraging domestic cryptocurrency exchanges for profitability and arbitrage seems to be leading to 2nd coming of “kimchi premium.”
Lee Ju-yeol, does not anticipate this rendition of kimchi premium to last. During a recent press conference, Lee forecasted Bitcoin demand would get reduced when central bank virtual currencies hit the market. Bank of Korea is aiming for the 2nd half of 2022 to put their own virtual won pilot to test.
Source: https://www.thecoinrepublic.com/2022/05/11/bitcoin-kimchi-premium-served-cold-after-heat-up-drops-3/