Kimchi premium surges 17% as the BTC price action has been far more stable and the South Korean market turned bullish so let’s read more in our latest cryptocurrency news today.
Since the extreme volatility in March, BTC’s price action was far more stable as the cryptocurrency continued hovering around $57K to $58K seeing some minor fluctuations with the BTC volatility index at 3.21%. In South Korea however, there was a resurgence of local crypto scenes and tightening regulations which have led BTC prices to surge to $69,300 on BitHumb. The current all-time high of BTC is $61,500 which is near 12% less than the current prices in South Korea so if you were to purchase BTC from Bithumb at current prices, you would have ended up paying $11,000 per coin.
This was because of the Kimchi premium. The Kimchi premium is now set at 16.83% which represents the spread in BTC price between South Korean exchanges and global exchanges. There are a few reasons for the premium hitting these high levels. First of all, it’s important to note that the government in South Korea regulated the crypto industry. This means that crypto exchanges like BitHumb are banned from servicing foreigners and the new AML laws limited the significant capital outflow. What’s more, it is that Korean Citizens cannot purchase BTC at lower prices on global exchanges because they don’t support the won. As a result, the liquidity and demand on South Korean exchanges are organic and locally driven. This is why, despite the regulations, the premium is raising and BTC is once again gaining traction in South Korea.
Will the Kimchi Premium continue rising remains to be seen however what’s more important is that it could lead to a resurgence in the Korean crypto markets. Because of the flurry of regulations, the crypto market cooled down in the past few years and exchanges like binance or OKEX gave up on Korea citing low trading volumes and dwindling user base which caused Kimchi Premium to drop by 6% two months ago.
South Korea’s improving market conditions and Bitcoin’s bullish narrative points to a revitalization of the industry but there’s still uncertainty around the regulatory environment of the country which could pose more risks ahead.
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Stefan has been writing articles for DCForecasts since 2016 in-house full time. As one of our main cryptocurrency writers, he focuses on covering the latest cryptocurrency news, technical charts, price analyses of coins and press releases. When he is not exploring and covering the latest topics in crypto, you can find Stefan playing basketball, tennis or cycling.
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