In South Korea Bitcoin Trading Below the Average Market Price
The so-called “kimchi premium”, which reflects how much more South Korean traders are forced to give for 1 BTC compared to American ones, is well known to participants in the cryptocurrency market. According to researchers from the University of Calgary, the maximum overpayment rate reached 54.48%.
Last week, Korean newspapers began to notice that Bitcoin was again trading lower in pairs with the South Korean won. On August 5, one of the country’s largest publications, Dong-a Ilbo, wrote that the price of Bitcoin in dollar markets is 2.15% higher than the price paired with the won on South Korean exchanges.
Analysts at Dong-a Ilbo believe that the disappearance of kimchi premium is due to the fall of the Korean currency. Since the end of July, it has depreciated against the dollar by almost 3%.
At the same time, the regulatory situation for cryptocurrency exchanges in South Korea is becoming increasingly complex. Banks are starting to implement stricter anti-money laundering requirements, and authorities recently announced that they will directly control the local market.
Researchers at the University of Calgary wrote in April that the problem of kimchi premium is primarily structural in nature. Money transfers between markets can take considerable time, which complicates the arbitration process.
According to CoinMarketCap, at the time of publication on the largest South Korean exchange, Upbit, the BTC / KRW pair is trading at $10,411.04, while the inter-exchange value of the Bitcoin exchange rate is $10,508.33.
Earlier, a number of experts, including senior eToro platform analyst Mati Greenspan, pointed to the re-occurrence of kimchi premiums as a factor in the completion of the bearish trend.
Author: Marko Vidrih