Bitcoin Fever Grips South Korea As “Kimchi Premium” Soars
A key indicator of retail investor enthusiasm for Bitcoin in South Korea has climbed to heights not seen in over two years this week.
The “Kimchi Premium,” referring to the gap between Bitcoin prices on South Korean crypto exchanges compared to global exchanges, rose to 10.32% on March 1st, according to data firm CryptoQuant. This represents the highest premium since January 2020.
Key details:
- The Kimchi Premium hit an all-time high above 50% in late 2017 during bitcoin’s historic bull run, when enthusiasm in South Korea was at a fever pitch.
- Strict capital controls in South Korea prevent large arbitrage opportunities.
- Kimchi Premium surges as Bitcoin hits new all-time highs.
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The price surge comes on the heels of Bitcoin reaching new all-time highs above $69,000 globally. This has further stoked interest from individual Korean investors. Prices on the leading Korean exchange, Upbit, exceeded 97 million Korean won at their peak this week, worth over $72,000 based on current exchange rates.
CryptoQuant founder says retail investors are back
CryptoQuant founder Ki Young Ju stated on X that the rising premium signifies Korean retail investors are “getting back” into the market amidst the overall bullish conditions. The premium has historically moved in tandem with Bitcoin price runs as local traders fear missing out on further gains.
FTX founder Sam Bankman-Fried has previously discussed exploiting the premium in years past with his former trading firm, Alameda Research.
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For the majority of investors, the premium appears to simply signify enthusiasm amongst South Korea’s active retail trader community.
Korean investors have returned in force to try and ride Bitcoin’s surge to further profits, as they have done frequently over the past five years when the premium has peaked.
