As per the latest data report of CryptoQuant, South Korea’s “Kimchi Premium” has surged to 18%, which is the highest for the country-exclusive premium for the past three years. While such a spike traditionally signals retail frenzy within the country, many analysts believe this time to be different. According to them, this dramatic growth in the country’s Bitcoin (BTC) premium is but the result of the staggering growth and increased popularity of crypto markets – nothing more and nothing less.
To those unfamiliar with the topic, the Kimchi Premium is a South Korean-exclusive premium representing the stark difference of BTC prices on global trading avenues compared to the country’s crypto exchanges. Although the precise reasons for such discrepancies may be complicated, they all ultimately stem from trading inhibitions uniquely observed in South Korea and the emergence of inland capital controls.
Although the Kimchi Premium is still showing no signs of slowing down, experts believe that its eventual collapse would no longer impact the broader market than the previous years because South Korea is no longer the prominent crypto hub it once was. As per the CEO of CryptoQuant, four years back, the Korean crypto market was found responsible for 7.8% of the total crypto trading volume worldwide. However, today, it only accounts for 2% – and sometimes, even lower.
The increasing premium led to the removal of several South Korean exchanges on CoinMarketCap
As announced today by CoinMarketCap, the crypto price tracking site has now effectively removed several South Korea-based exchanges from its highly-regarded BTC price tracker due to the continual increase in its premium, which is found to be about 6% higher than other exchanges. Notably, even the most prominent Korean exchanges, namely Coinone, Korbit, Upbit, and Bithumb, aren’t exempted from the said removal.
Molly Jane Zuckerman, the content manager of CoinMarketCap, states that the data representing South Korean exchanges would only return to the website once its crypto prices stabilize. And as of this moment, it does not still appear to be doing so. This harkens back to when the site took the same approach when the South Korean premium went out of control last 2018, where it peaked at an outrageous 45%.