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Bitcoin’s value has experienced a significant uptick, doubling since the beginning of the year. Contrary to expectations, however, the well-known “Kimchi premium” in South Korea is conspicuously absent in this recent bullish trend. This constitutes a striking departure from past bullish cycles, where this phenomenon was readily apparent. Currently, Bitcoin prices in South Korea are actually below the global average, creating a “Kimchi discount” instead.

South Korea Registers an Atypical ‘Kimchi Discount’ Despite Being the 5th Largest Bitcoin Trading Pair Globally

This month alone, Bitcoin has seen a notable gain, appreciating by 27.9% against the U.S. dollar. As of 10:15 a.m. EDT, Bitcoin was trading just over $34,000, achieving a one-week gain of 14.8%.

Interestingly, amid this upward price movement, the trading prices for Bitcoin on leading South Korean cryptocurrency exchanges like Upbit and Bithumb are relatively lower. This is in sharp contrast to the ‘Kimchi premium,’ a phenomenon that was commonly observed during past crypto bull markets, where Bitcoin prices in South Korea were typically several hundred dollars higher than the global average.

Data captured on October 27, 2023, at 10:15 a.m. EDT, revealed that Bitcoin’s price on Bithumb was approximately $190 below the global average.

In spite of this, Bitcoin trading continues to flourish in South Korea. According to data from cryptocompare.com, Bitcoin is the fifth-largest trading pair in the country, representing 3.73% of all global Bitcoin trades.

Although the global trading price of Bitcoin stands at $34,059 at the time of this report, it is being traded for $33,902 on Upbit and roughly $33,869 on Bithumb. This equates to a discount of $157 and approximately $190 per unit on Upbit and Bithumb, respectively.

Breaking with the traditional “Kimchi premium,” which usually affects not just Bitcoin but also other cryptocurrencies like XRP and ETH, the current discount is peculiarly affecting Bitcoin’s value alone.

For instance, Ethereum is showing only a marginal price discrepancy, around $10-15 per unit lower. In terms of trading volume, Bithumb reported nearly $408 million in global trades last Friday, while Upbit reported a significantly higher volume of $1.7 billion. Among the key players like Bithumb, Coinone, and Korbit, Upbit takes the lead in South Korea, responsible for almost 80% of the nation’s crypto trading activity.

Attempts by the South Korean government and regulatory bodies to mitigate the “Kimchi premium” appear to have been effective to some extent. Although the premium is absent, the emerging “Kimchi discount” presents a new opportunity for arbitrage trading.

What are your insights regarding the absence of the “Kimchi premium” in the current Bitcoin bull market? Kindly share your perspectives on this issue in the comments section below.

Frequently Asked Questions (FAQs) about Kimchi Discount

What is the main focus of the article?

The article primarily focuses on the uncharacteristic absence of the “Kimchi premium” in South Korea during Bitcoin’s recent bullish trend. Instead of the premium, a “Kimchi discount” is being observed, where Bitcoin is trading at lower prices in South Korea compared to the global average.

What is the ‘Kimchi Premium’?

The “Kimchi Premium” is a phenomenon where cryptocurrencies, particularly Bitcoin, trade at higher prices in South Korea compared to the global average. This typically occurs during bullish market trends.

What is the ‘Kimchi Discount’?

The “Kimchi Discount” is the opposite of the “Kimchi Premium,” wherein Bitcoin and potentially other cryptocurrencies are traded at lower prices in South Korea compared to the global average. This is the focus of the article and is seen as a notable deviation from previous market trends.

What data supports the presence of a ‘Kimchi Discount’?

As of October 27, 2023, at 10:15 a.m. EDT, Bitcoin’s price on Bithumb was approximately $190 below the global average. Moreover, while Bitcoin’s global trading price was $34,059, it was being traded for $33,902 on Upbit and around $33,869 on Bithumb.

Why is the absence of the ‘Kimchi Premium’ significant?

The absence of the “Kimchi premium” is significant because it deviates from historical patterns where Bitcoin and other cryptocurrencies traded at higher prices in South Korea during bullish market cycles. This could indicate changes in market dynamics, investor behavior, or regulatory influence in the country.

What opportunities does the ‘Kimchi Discount’ offer?

The “Kimchi Discount” presents an opportunity for arbitrage, where traders can buy Bitcoin at a lower price in South Korea and potentially sell it at a higher price in other markets.

Which cryptocurrency exchanges are cited in the article?

The article cites Upbit and Bithumb as the leading cryptocurrency exchanges in South Korea where the “Kimchi Discount” is observed. These exchanges are major players in the South Korean cryptocurrency market.

What is the current market share of Bitcoin trading in South Korea?

According to data from cryptocompare.com, Bitcoin is the fifth-largest trading pair in South Korea and accounts for 3.73% of all global Bitcoin trades. Upbit dominates the market, commanding nearly 80% of South Korea’s crypto trading volume.

Has the South Korean government attempted to regulate the ‘Kimchi Premium’?

Yes, the South Korean government and regulatory agencies have made efforts to curb the “Kimchi Premium” in the past. While there is no current sign of a premium, the presence of a “Kimchi Discount” suggests that these efforts may have had an impact.

More about Kimchi Discount

  • Cryptocompare.com Data on Global Bitcoin Trading
  • Upbit Exchange Overview
  • Bithumb Exchange Overview
  • Historical Trends of ‘Kimchi Premium’
  • South Korean Government Regulatory Efforts on Cryptocurrency
  • Arbitrage Trading Opportunities in Cryptocurrency
  • Global Bitcoin Price Index
  • Investor Behavior in Cryptocurrency Markets

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9 comments

MarketWatcher October 28, 2023 - 1:39 am

Are people in SK just less interested in Bitcoin now or is this due to some specific regulatory changes? Anyone got insights?

Reply
CryptoFan101 October 28, 2023 - 2:27 am

Interesting read! So the government’s attempt to regulate the premium actually worked? Or is this more about market dynamics shifting?

Reply
CryptoCurious October 28, 2023 - 2:52 am

First time I’ve heard of a Kimchi discount. But then again, crypto market always keeps you on your toes. Never a dull moment.

Reply
FiscalFred October 28, 2023 - 1:11 pm

Is Ethereum also affected? The article says its only a minor discount but still…

Reply
Investor_Jane October 28, 2023 - 1:42 pm

Great piece! Makes you wonder if this discount offers a good arbitrage opp. Buy low in Korea, sell high elsewhere.

Reply
CurrencyCarl October 28, 2023 - 2:08 pm

Given that Upbit holds like 80% of the market in SK, could they be influencing this trend somehow? Just a thought.

Reply
TechieTim October 28, 2023 - 3:47 pm

The times they are a changin’. I remember making a good profit from that Kimchi premium a couple of years back. now its all flipped.

Reply
JohnDoe October 28, 2023 - 4:22 pm

Wow, never thought I’d see the day where the Kimchi premium turns into a discount. What’s goin on in South Korea?

Reply
SallyQ October 28, 2023 - 8:36 pm

Honestly, kinda shocked. Always saw South Korea as the place where BTC prices go off the charts. guess times are changing.

Reply

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