[Korean Exclusive News]
Author: Shin Yi Jin, South Korea
The “Kimchi Premium” phenomena where cryptocurrencies are exchanged at a higher price in local (Korean) exchange market than international exchange market is happening again after 4 months.
According to local cryptocurrency exchange websites such as Bithumb and Upbit, as of 1600 on 14 May, Bitcoins exchanged in local exchange markets are priced at 9,450,000 WON, which is 6% more expensive than that in the US market (based on Bitrex).
Most of other major cryptocurrencies exchanged in local markets including Etherium and Bitcoin Cash, Dash, Ripple and Quantum are also exchanged at about 6% higher prices than in the US markets.
This is the first time in 4 months after January, when a single Bitcoin’s price shot over 25,000,000 WON, that the “Kimchi Premium” rose to 6% from the previous average of 2~3%. In February, the local market even experienced a “Reverse Premium” phenomena where the cryptocurrencies were exchanged at a lower price compared to international markets due to new regulations such as the real-name accounting system.
To highlight, the “Kimchi Premium” was only at about 3% even after the G20 Chancellos’ meeting in April when demand in the market was remarkable. The current rise to 6% is analysed to be a resulting effect of a mass entering of local investors into the market with increasing number of Korean major companies focusing on building of blockchain platforms.
A personnel from the industry noted that “the steep rise of the “Kimchi Premium” shows that local investors are still buying or observing the cryptocurrencies even in the current situation of the country’s largest exchange website Upbit undergoing police investigations” and analysed that “although there are still some bullish factors such as Facebook releasing a cryptocurrency, it is hard to give a long-term prediction because it is a very volatile market which is prone to fluctuate even with a minor unfavourable factor”.