Multiple media reports of a return to the “kimchi premium” – a phenomenon whereby bitcoin (BTC) and major altcoin prices on South Korean exchanges rises to markedly higher levels than on international trading platforms – may be “exaggerated,” according to a South Korean expert.
Mira Kim, a blockchain consultant based in South Korea, told Cryptonews.com,
“While last time around [late 2017], you had all-comers involved in BTC trading, this time it seems it’s mainly the hardcore, loyal crypto folks who are getting involved. I think it’s something of an exaggeration to say we’re back in the spirit of those days.”
“The investors I deal with are quietly very optimistic about rising prices, but with so many regulations and restrictions coming in [namely crypto tax and strict banking and compliance measures for crypto exchanges], most exchanges are conversely still quite depressed and concerned for their very survival,” Kim added.
Kim’s comments come weeks after another expert told Cryptonews.com that the prospects of a full-scale return to 2017 seemed unlikely.
However, trading volumes on major local exchanges are up sharply in the past few months.
Trading volume on Upbit:
In either case, data from kimchi premium price tracking site scolkg.com does indeed show a discrepancy between BTC and major altcoin prices on the “big four” South Korean exchanges (Upbit, Bithumb, Korbit and Coinone). But at the time of writing, the gap between prices on – for instance, Upbit/Korbit and Binance, bitFlyer or BitMEX is hovering between 2% and 4%.
While such margins are not altogether insignificant, some may argue that media outlets – both domestic and international – may have jumped the gun with calls of a “return to the kimchi premium.”
On Twitter, some concurred.
@AriDavidPaul Kimchi premium still sub 3%. Not buying hard enough
Statistics compiled by Cryptoquant also show some gaps in prices, but not the kind of sustained and notable wedge between international and South Korean exchanges’ BTC prices last seen in the very early days of 2018.
In the 2017 boom that saw septuagenarians spending their pensions on tokens and teens buying coins with their pocket money, the kimchi premium rose to just under 55% at its peak, with regular discrepancy levels of 10%-30% commonplace for a period of months.
Less than a year ago, the kimchi premium was replaced by a small “Korean bonus,” with prices in South Korea around 1% cheaper than on international platforms.
At pixel time (09:29 UTC), BTC trades at USD 33,915, correcting from USD 36,000 touched earlier today. The price is still up by almost 8% in a day and 22% in a week.
Order Book Sharing Ban Could Shake South Korean Exchanges to the Core
Current Bitcoin ‘Mania’ ‘Unsustainable’, Long-Term Target – Over USD 146K – JPMorgan
Bitcoin, Ethereum, XRP, Bitcoin Cash, Litecoin, Chainlink Price Predictions for 2021
Crypto in 2021: Bitcoin To Ride The Same Wave Of Macroeconomic Problems
Bitcoin Wheel Cannot Be Stopped