Key Points
- The 'Kimchi Premium' in South Korea for Bitcoin reached a 27-month high of 10.32%.
- This premium indicates a strong buying pressure from South Korea's retail investors.
The 'Kimchi Premium' Phenomenon
The 'Kimchi Premium', a term used to denote the price difference between cryptocurrencies in South Korea and the rest of the world, has reached a 27-month high for Bitcoin.
This data, provided by CryptoQuant, compares South Korea's Bitcoin price with the USD market.
Factors Affecting the Premium
The cryptocurrency prices in South Korea are unique due to several factors.
Foreign investors are blocked from trading on South Korean exchanges, and Korean investors purchasing large amounts of cryptocurrency from foreign exchanges for arbitrage could face penalties under the country's Foreign Exchange Transactions Act.
This limited supply of cryptocurrencies domestically, coupled with increasing local demand, often results in a larger price gap.
The surge in the 'Kimchi Premium' may suggest a stronger buying pressure from South Korea's retail investors.
Bitcoin broke its previous all-time high price, surpassing the $69,000 mark. On South Korea's Upbit exchange, Bitcoin's value exceeded 97 million Korean won ($72,926), according to local reports.
Bitcoin has since seen a decrease in gains and is trading around $65,800.
