Bitcoin’s ‘Kimchi Premium’ Hits Three-Year High

On February 3rd, the ‘kimchi premium’ on Bitcoin—a measure of price inflation on South Korean crypto exchanges—reached a three-year high, exceeding 11.9%.

#Bitcoin Kimchi Premium is 12% right now—a three-year high. The main reason for BTC drop seems to be the strong DXY. pic.twitter.com/fjFOyUH5Pr

— Ki Young Ju (@ki_young_ju) February 3, 2025

The widening price gap for the leading cryptocurrency between South Korean exchanges and the broader market is attributed to a significant downturn amid news of President Donald Trump’s aggressive tariff policies.

“The ‘kimchi premium’ typically rises during bull cycles when Korean investors overpay. However, it can also spike during panic selling periods. This occurs when there is less selling pressure on Korean exchanges compared to global markets,” noted Presto Research analyst Min Jung.

In his view, the inflated measure will persist if American investors continue to sell. The expert emphasized that historically, the ‘kimchi premium’ has been around 5%, to which the market will return upon stabilization and recovery.

The last time an abnormally high level was recorded was in March 2024, at 10.32%.

DNTV Research expert Bradley Park believes that most retail investors have either “fully invested in spot” or moved funds to DEX.

“In this situation, the ‘kimchi premium’ does not reflect retail investor overbuying. More likely, it has risen as a passive response to uncertainty regarding the dollar environment,” Park explained to CoinDesk.

In December 2024, the South Korean government postponed the introduction of new cryptocurrency taxes until 2027.