BTC Kimchi Premium Surges As Bitcoin Price Reclaims $100K

South Korea’s cryptocurrency market has recorded a notable price divergence, with the “kimchi premium” for Bitcoin reaching 9.7% on Monday morning, its highest level in three years. As Bitcoin price reclaims its higher price range it remains to be seen how the market will progress.

This premium, representing the price difference between Bitcoin trading on South Korean exchanges versus international markets. This came amid a broader cryptocurrency market decline that saw Bitcoin price fall to $95,000.

According to CryptoQuant data, the last time the premium reached such levels was in April 2024, when it exceeded 13%.

Bitcoin Kimchi Premium Surge: What to Expect from Bitcoin Price

The kimchi premium’s rise occurs against an unusual backdrop of market behavior. While Bitcoin price declined globally, South Korean exchanges maintained relatively stable prices, creating a widening gap between domestic and international markets.

CryptoQuant’s data shows local traders paying up to 12% more for Bitcoin compared to global rates, even as Bitcoin price dropped to $95,000 on international exchanges.

This price divergence stems from several structural factors in South Korea’s cryptocurrency market. The absence of a futures trading market means the country avoids the cascading liquidations often seen in global markets during price declines.

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Additionally, the market’s composition, dominated by retail investors rather than institutions, results in different trading patterns compared to international exchanges.

CryptoQuant CEO Ki Young Ju notes that the current premium differs from previous spikes.

Rather than reflecting aggressive buying at lower prices, data indicates traders are converting Bitcoin directly to USD instead of Korean won. This behavior suggests a shift in local trading strategies and could indicate changing market dynamics within South Korea’s cryptocurrency ecosystem.

Foreign Investors Unable to Access Local South Korean Exchanges

South Korea’s crypto market operates under strict capital control regulations, creating a closed ecosystem that directly influences the kimchi premium. These regulations prevent foreign investors from accessing local exchanges and limit domestic traders’ ability to conduct large-scale arbitrage with overseas platforms.

Traders who attempt to exploit the premium by purchasing large amounts of cryptocurrency from foreign exchanges risk penalties under capital control laws.

The recent geopolitical developments have added another layer of complexity. U.S. President Donald Trump’s announcement of severe tariffs on imported goods from Canada, Mexico, and China has increased market uncertainty.

This international trade tension coincides with a unique market signal – Bitcoin blocks remaining notably empty, reaching levels not seen since late 2022.

Market analysts suggest this reduced on-chain activity indicates Bitcoin holders are keeping their assets in long-term storage, potentially creating a supply squeeze similar to conditions that preceded previous market rallies.

South Korean Prices show Resilience

The premium historically serves as an indicator of local market sentiment, though its current situation differs from previous cycles. While past premium spikes often coincided with aggressive buying during price increases, the current situation shows resilience in South Korean prices even during global market corrections.

The combination of empty Bitcoin blocks and sustained local premiums presents an interesting market scenario. With Bitcoin’s on-chain activity reaching levels comparable to the 2022 market bottom, when prices subsequently rose by 500%, traders are watching for similar patterns.

The reduced blockchain activity suggests Bitcoin holders are maintaining long-term positions rather than actively trading, potentially limiting available supply.