Kimchi Premium Plummeted From 23% To 14%

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The overpayment in the bitcoin market in South Korea relative to global values ​​dropped significantly along with the price of cryptocurrency on individual exchanges this Wednesday.

The course variance, otherwise known as the kimchi premium, recently peaked at over 23% since 2018. The observed phenomenon is associated with an increased demand for cryptocurrency among traders in South Korea. The country’s monetary system is closed from the outside world, which is why arbitrageurs cannot take advantage of the current situation to their advantage and align the rate, as happens on other exchanges, even with less significant deviations.

As noted by The Block analyst Larry Cermak, the overpayment fell from 23% to 14% in five hours, and the drop from 17% to 9% occurred in 10 minutes. By the time of publication, the value had recovered to 15%. Prior to this, the price of bitcoin on Korean exchanges rose above $ 70,000.

From 9 am Moscow time, the price of bitcoin on the Korean Bithumb exchange fell by more than 10% in an hour. The decline in Western stock exchanges at the same time was less than one and a half percent. The exact reasons for this are unknown.


“It looks like someone has finally figured out how to arbitrate the kimchi premium,” wrote Ki Yong Joo, CEO of the analytical platform CryptoQuant. “Trading volumes over a 30-minute period on South Korea’s largest exchange, Upbit, exceeded Binance.”


There is no evidence of a successful withdrawal of a large volume of traditional currency from Korean exchanges so far. However, the reason for today’s crash may indeed have to do with Upbit, which temporarily halted I / O of Korean won. By now, the service has been restored.

As noted by Arcane Research analyst Vetle Lunde, in the past, the pullback of the Korean overpayment from the peak coincided with the emergence of negative dynamics in the bitcoin market.

UPD: Zhu adds:


“One sign of arbitration. The net inflow of funds to Bithumb increased while it fell on other exchanges. It looks like the whales are bringing bitcoins to Korean exchanges. ”

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