While many cash exchanges show stable prices in a few select areas of the world, bitcoin is selling at a premium. This is now the case in South Korea, where there is a price differential on South Korean domestic exchanges compared to foreign exchanges, also known as the kimchi premium.
Bitcoin, Ethereum and Bitcoin Cash are granted in South Korea
Bitcoin prices on the domestic crypto currency exchanges in South Korea are much higher than on most exchanges around the world. For example, the price of bitcoin (BTC) reached $58,500 per unit Tuesday morning (EST). However, in South Korea, BTC prices are much higher than in the rest of the world. At the time of publication, Bitumba’s BTC price was 77,804,000 KW or $69,423 per unit. This premium is more than 18% higher than the world average.
Exchange rate via South Korean Bitumen Exchange at 6. April 2021.
The Korbit exchange in South Korea also has the same price range, 18% higher than the world average. A single BTC trades on Corbit for $69,371, a few dollars less than the price of bitumen. The price difference between the rest of the world and South Korea is called the kimchi premium, and it was evident during the 2017 rush. BTC is not the only crypto asset with a kimchi premium, as a variety of alternative digital currencies are also seeing premiums.
Shortage of money and South Korean retail sales
Another example shows that Ether (ETH) is trading on Corbit at $2,504 per unit, while the global average is only $2,122 per Ether. The kimchi premium is 18% for ETH prices, and Bitcoin Cash (BCH) is trading at $790, 18.97% above the global average of $664 per BCH.
by South Korean stock exchange Korbit on the 6th. April 2021.
No one knows exactly why the price is 18% higher in South Korea, but some suspect a lack of liquidity in bitcoin. Along with Japan and other countries in the region, South Korea is on the verge of rapidly adopting the FATF requirements, which will affect liquidity and increase demand and premiums.
Others say Korean retailers are returning to the cryptocurrency space as they did in 2017. The Kimchi award has become a hot topic on social media.
With the kimchi premium rising, I was a bit critical of BTC’s performance after the previous surges in the Korean pair BTC, said Vetle Lunde, an analyst at Arcane Research. While it is impossible to say whether the price of kimchi has peaked or will continue to rise, it worries me, he added.
What do you think of the premiums for Bitcoin and Ethereum on South Korean exchanges? Let us know what you think in the comments below.
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