Bitcoin Analysts Say 'Kimchi Premium' Isn't Distress Signal It Once Was

But this time could be different, say analysts – perhaps the result of the spectacular growth and maturation observed in crypto-currency markets in recent years.  

The kimchi premium is the difference between the price of Bitcoin on South Korean trade and the rate currently running on other global trading platforms. The reasons for the variance are complicated. 

Historically, spikes in the Korean premium have taken the wind out of the bull runs, according to data tweeted by Arcane Research analyst Vetle Lunde. Historically, spikes in the Korean bonus have taken the wind out of bull races, according to data tweeted by an obscure vet researcher on Mondays.  

The measure peaked at 47% in January 2018 and 63% in May 2017, immediately before market corrections. 

It also peaked at small price peaks at 6.5% in November 2018 and 8.5% in June 2019. Recently, the premium has increased to 18 per cent, the highest since February 2018, according to the crypto data source. And while Bitcoin prices have doubled this year, the Korean spread is still showing no sign of peak. 

There is no way to tell if the premium is about to peak or if it will continue to rise.  In addition, South Korea is no longer the crypto heavyweight it used to be in the last significant market cycle in 2017-18. 

"the Korean market contributed 7.9% of the global volume of crypto trade in 2017," ki-young ju, CEO of the crypto company based in South Korea, told coindesk in a telegraphic chat.

Bitcoin fell over 49% in one month after the kimchi premium peaked on Jan. "therefore, a possible collapse in the premium is unlikely to have a significant impact on the market as a whole," he said. Bitcoin Korea premiumbitcoin fell by more than 49% in a month after premium kimchi peaked on Jan.

And while the previous crypto fever in South Korea was primarily fueled by investors belonging to the age group of 20 to 30, the latest frenzy has seen equal participation from Koreans in their 40s and 50s, as discussed last month by The Diplomat, a magazine covering politics, society and culture in the Indo-Pacific region.

"Through cryptocurrency and stock market transactions, South Koreans – young and old – are actively seeking to secure steady streams of passive income," The Diplomat reported. Price performance from Bitcoin.

And whereas the previous crypto fever in South Korea was mainly driven by investors in the 20-30 age group, The last frenzy saw equal Korean participation in the forties and fifties, As reported by The Diplomat last month, a politically-minded magazine, the social and cultural aspects of the Indo-Pacific region.

Still, a minor pullback cannot be ruled out. 

"Thanks to cryptocurrency and stock exchange transactions, South Koreans – young and old – are actively seeking to secure regular flows of passive income," he said. "increasingly, after covid-19, Both age groups appear alarmed by monetary inflation fears followed by government stimulus measures, real estate prices have skyrocketed, and wage stagnation in a highly competitive employment market." The latest rise in crypto-currency interest in South Korea could be more sustainable, not just hypothetical, fervor.still, a small withdrawal may not be excluded.

At the time of the press, Bitcoin changed hands by almost $58,000, down 2% on the day.

Prices have been narrowly limited to between $55,000 and $60,000 since late March. 

That's because the Korean market is served by local exchanges that provide Korean won (KRW) fiat trading pairs, and local users do not trade cryptocurrencies using tether (USDT) or BTC most of the time, as per BINANCE Research. 

Perform a conventional arbitrage strategy by purchasing Bitcoin on Western exchanges and selling the same on Korean exchanges at a relatively higher price is quite difficult. Is because the Korean market is served by local stock exchanges that supply Korean won (krw) fiat trading pairs, and local users are not negotiating cryptocurrencies using tether (usdt) or btc for the most part, according to the binary search. Therefore, a Korean wanting "arb" bonus must first purchase a token with krw that could be exchanged for usdt or other stablecoin, that would then be used to buy Bitcoin on an un-American exchange.

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"Therefore, a Korean wanting "arb" bonus must first purchase a token with KRW that could be exchanged for USDT or other stablecoin, that would then be used to buy bitcoins on anon-U.S. trade. 

Bitcoin must be transferred back to Korean trade for liquidation. Bitcoin will need to be moved back to Korean trade for liquidation.