Kimchi premium on Bitcoin in South Korea narrows to 9%, then rebounds to 15%

The Kimchi premium on Bitcoin in South Korea relative to global values has more than halved as Bitcoin’s price fell. The so-called ‘Kimchi premium’ subsequently rebounded to 15%.

Kimchi premium has started to nosedive. From above 23% to about 14% in just about five hours. Worth watching this closely pic.twitter.com/8Z4yKGQubs

— Larry Cermak (@lawmaster) April 7, 2021

According to The Block analyst Larry Cermak, the ‘Kimchi premium’ narrowed from 23% to 14% in five hours, and the drop from 17% to 9% took 10 minutes.

AND we are below 10%… This has dropped from 17% premium to now around 9% in the last 10 minutes. Someone is making 10s of millions as we speak pic.twitter.com/6l2JPr6AeK

— Larry Cermak (@lawmaster) April 7, 2021

At the time of writing, Bitcoin was trading on the South Korean crypto exchange Bithumb at around $65,500. The ‘Kimchi premium’ had rebounded to 15%.

The price of Bitcoin on overseas exchanges is $57,000, according to CoinGecko.

The Ethereum Kimchi premium exceeded 14%. At the time of writing, the price of the second-largest cryptocurrency stood at $2,024 on foreign platforms and $2,311 on South Korean ones, in USD terms.

Arbitrageurs cannot take advantage of the price discrepancy. According to The Block, South Korean bitcoin exchanges are prohibited from opening accounts for foreign nationals, and foreign platforms do not support Bitcoin paired with the won.

The publication citing a study from the University of Calgary noted that from 2016 to 2018 the ‘Kimchi premium’ averaged 4.8%. At its peak, the indicator reached almost 55%.

On 5 April 2021, the price on Korean exchanges reached $66 500 in the local currency. The ‘Kimchi premium’ exceeded 15%.

In 2019, ForkLog reported that in Asian countries Bitcoin traded 3-5% higher than on other markets.

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