South Korea’s Bitcoin ‘Kimchi Premium’ Returns as Local Prices Rise
Bitcoin is currently trading at a higher price on South Korean exchanges compared to global platforms, marking the return of the so-called Kimchi Premium. This term refers to the price difference that often appears in South Korea due to strong local demand and the country’s capital controls, which limit the free flow of money in and out of the market.
According to data from CoinGecko, bitcoin’s price on Upbit, South Korea’s largest exchange, is nearly 1% higher than on Binance, a major global exchange. The premium has historically reached as high as 21.5% in 2022, driven by retail investors and limited access to international markets.
Why the premium happens
South Korea’s crypto market is partly isolated from the global market. Strict capital controls and trading regulations make it harder for local investors to move money abroad. As a result, when demand for bitcoin rises in South Korea, prices on local exchanges can climb higher than elsewhere. The country also trades bitcoin more often in Korean won rather than U.S. dollars, which adds to the price difference.
The Kimchi Premium is often seen as a sign of strong retail interest, as South Korea has fewer large crypto funds compared to other markets.
Current market context
Bitcoin’s recent price rise has coincided with broader market movements. Over the past month, bitcoin has increased by 24%, reaching $78,287. This surge followed an announcement by the U.S. Treasury in August that it would expand its liquidity-support operations, which weakened the dollar and benefited assets like bitcoin and gold. Additionally, political developments, such as discussions around the Clarity Act for crypto regulation, have contributed to market optimism.
What is confirmed
- Bitcoin is trading nearly 1% higher on South Korea’s Upbit exchange compared to Binance.
- The Kimchi Premium has returned, driven by local demand and capital controls.
- Bitcoin’s price has risen 24% over the past month, reaching $78,287.
- The premium reached 21.5% in 2022.
