According to Cryptoquant data, Bitcoin Kimchi Premium in South Korea reached 12 %, although Bitcoin fell to $ 91,000. This premium shows that the price difference between local and global markets has increased. In other words, South Korean investors pay much more for Bitcoin than global markets.
Bitcoin Kimchi Premium has increased
During the weekend, the crypto market has experienced a huge decrease in deleting more than $ 400 billion from its total value. This took place after US President Donald Trump began to apply 25 %tax, including energy products (such as oil and natural gas) imports from Canada and Mexico. Of course, the crypto market reacted to this climbing trade war. Interestingly, BTC price fell, while Kimchi Premium increased.
Historically, when Kimchi premium was high, Korean investors meant strong demand for Bitcoin. However, analysts say that the current increase is not caused by local purchases, it has occurred as a reaction to external factors, and the US Dollar Index (DXY) rise stands out as the main reason.
What is the meaning of this development?
Kimchi Premium is a phenomenon seen in a strong demand period in the crypto market of South Korea, and usually offers more in -depth signs of structural restrictions. South Korea’s strict capital control limits arbitrage opportunities by making the cross -border movement of the funds. In addition, the lack of a crypto futures market in the country plays an important role. Because the decreases in the global markets, often deepened with the liquidation of successively, while South Korea does not experience such a situation.
The market in the country is largely directed by individual investors. This leads to large -scale sales rarely and makes the market more stable. Cryptoquant CEO, Ki Young Ju, said that the last increase of Kimchi Premium is not due to the efforts of Korean investors to get Bitcoin at lower prices. Instead, he said that Bitcoin was surrounded by US dollar instead of Korean won, and that this situation showed less Trader’s return to local Fiat money.
This tendency shows that rather than increasing demand, capital outputs lead to the expansion of Kimchi Premium. Investors turn their crypto currencies into a safer asset, such as US dollar, rather than buying Bitcoin by paying much more than the local currency. This can be an important turning point in terms of crypto money mobility in South Korea.
