South Korea’s Crypto Trading Volume Surges
Recent data shows that there has been a significant increase in crypto trading volume in South Korea. Two exchanges, Upbit and Bithumb, are responsible for over 10% of the global trading volume as of January 4, 2024.
Bitcoin Commands a Premium in South Korea
In South Korea, the price of bitcoin is higher compared to the global average. While the global price is around $43,356 per unit, it trades at approximately $44,317 per coin in South Korea.
Strong Trade Volumes on South Korean Exchanges
South Korean exchanges such as Upbit, Bithumb, Coinone, and Korbit are experiencing increased crypto trade volumes. Upbit has conducted $6 billion and Bithumb $3.7 billion in 24-hour trades, representing 10.1% of the global trade volume.
The Kimchi Premium
South Korea is known for its cryptocurrency premiums, often referred to as the “Kimchi Premium.” This premium is a result of factors such as high demand for crypto assets within South Korea, capital controls, regulatory landscape, and unique foreign exchange regulations.
Persisting Premiums and Significant Trading Volume
Despite the South Korean government’s disapproval of elevated prices, the premium trend continues. The Korean won accounts for a significant portion of the trading volume for bitcoin and other cryptocurrencies. The won is particularly significant in the trading of crypto assets such as SEI, POWR, BLUR, LSK, and ETH.
Challenges in Exploiting Price Differences
Strict capital controls and regulatory frameworks in South Korea make arbitrage opportunities challenging and less efficient. This sustains the premium in the localized region. Despite uncertainties in the crypto market, South Korea remains actively engaged with digital assets.
Hot Take: South Korea Leads in Crypto Trading with Premiums
South Korea has emerged as a leader in the crypto trading industry, with two exchanges contributing significantly to the global trade volume. The premium on bitcoin and other cryptocurrencies in South Korea reflects the country’s unique market dynamics, including high demand and strict regulations. While some may try to exploit these price differences for profit, the capital controls in South Korea make it challenging to do so efficiently. As a result, the Kimchi Premium persists. South Korea’s robust engagement with digital assets signals its continued influence and importance in the global crypto market.
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