As per CryptoQuant, Bitcoin’s persistent rise these past days brought the so-called “Kimchi Premium” phenomenon back to South Korean crypto exchanges. The Kimchi Premium, named after the popular South Korean dish, refers to the much higher prices for cryptos on Korea-based exchanges in periods of high volatility, such as that of today. This phenomenon is also what most sees as the main reason Bitcoin’s (BTC) price value on Asia’s most active trading hours is on a drop-off. This is because traders aim to sell BTCs on South Korean crypto exchanges for higher returns.
Doo Wan Nam, business development head of Maker Asia, states that the Korean crypto community feels delighted for the return of Kimchi Premium. He adds that for the majority of last year, there was actually a significant 1-3% crypto discount within the country.
A 2019 research regarding the subject points out that the Bitcoin/Korean Won trading pair is more present in Korea compared to the usual Bitcoin/Dollar trading pair that is predominant in other locations. Basically, Koreans prefer their own currency despite the USD being more profitable, thus the Kimchi Premium phenomenon.
Bitazu Capital’s founder, Mohit Sorout, notes that it is the first time since July of2019 that the premium went as high as 6.35%. He adds that this is an excellent indication that the market is on an imminent surge, implying that traders should capitalize on the premium despite the inherent challenges of actually doing so.