Bitcoin maintains premium in South Korea despite global dip

Bitcoin in South Korea remains a hot commodity. While the global BTC price hovered around $59,000 on September 1, South Korean exchanges saw it trading at a premium of $59,900, reflecting a 1.53% difference.

The Korean premium, often called the Kimchi Premium, is when Bitcoin’s price might be listed at a higher price on a South Korean exchange than in US or European markets, creating arbitrage opportunities.

South Korean investors drive Bitcoin market recovery

Bitcoin has traded at a premium in South Korea since October 30, 2023, with only one drop in the negative on August 22, 2024. According to CryptoQuant , BTC was priced at roughly $60,500 per coin that day, rising to $64,000 within two days. On August 22, the price in South Korea slipped 0.36% below the global average. However, the drop was short-lived.

By August 23, the premium had recovered to roughly 1%, 0.93% higher than BTC’s global average. The premium rose to 2.63% on August 27 before settling at 1.94% on August 29. As August approaches, Bitcoin is selling at a 1.52% premium on the South Korean cryptocurrency market Upbit, with prices at $898 higher. 

Following the US Securities and Exchange Commission (SEC) approval of a Bitcoin spot ETF earlier this year, the Kimchi Premium saw a notable increase. Meritz Securities reports that on March 16, the Kimchi Premium exceeded 10%, marking its highest level in nearly two years and ten months since May 2021. On that date, Bitcoin’s price in South Korea reached 102.4 million won.

Coinbase premium falls short of South Korean levels

While other exchanges, like Coinbase, saw a small premium from August 4th to 28th, 2024, it remained far below South Korea’s, peaking at just 0.07% on August 22nd . However, according to CryptoQuant metrics, Coinbase BTC prices slipped back into the negative after 24 days of a slight premium.

South Korea’s stringent capital controls and regulatory frameworks can complicate and diminish the efficiency of arbitrage opportunities, helping to sustain the local premium. Although the future of these premiums and the broader cryptocurrency market remains uncertain, current trends indicate strong engagement with digital assets in South Korea.