Domestic trading prices have fallen below international rates, marking a rare reversal of the nation’s traditionally higher cryptocurrency valuations. (Image courtesy of Yonhap)
SEOUL, Nov. 13 (Korea Bizwire) – As Bitcoin reaches unprecedented heights globally, an unusual phenomenon has emerged in South Korea: domestic trading prices have fallen below international rates, marking a rare reversal of the nation’s traditionally higher cryptocurrency valuations.
According to data from CryptoQuant, a cryptocurrency analytics firm, the Bitcoin Kimchi Premium Index registered at -0.88% on November 10. The index hit -1.97% on November 7, its lowest point since July 2, 2023, when it reached -2.19%.
The Kimchi Premium, which measures the price difference between domestic and international exchanges, has historically been positive in South Korea. Its current negative value indicates relatively weak buying pressure from Korean retail investors compared to global markets.
While analysts expect the premium to gradually turn positive, the current trend stands in sharp contrast to last year’s bull market, when the premium approached 10%. Some alternative cryptocurrencies have seen even more dramatic premiums in the past, reaching as high as 30% in 2021 and 50% in 2018.
“The disappearance of the Kimchi Premium reflects stronger cryptocurrency trading enthusiasm overseas compared to Korea,” said Yoon Chang-bae, a researcher at Upbit’s Investor Protection Center. “The cryptocurrency investment boom seems particularly strong in foreign markets following the U.S. presidential campaign.”
Analysts point to former President Donald Trump’s campaign rhetoric, including statements about stockpiling Bitcoin as a strategic asset, as helping ignite foreign investor sentiment.
However, some experts suggest that neither domestic nor international cryptocurrency markets have reached overheated levels yet. The “Crypto Fear and Greed Index” calculated by CoinMarketCap stood at 79 yesterday, still below the “extreme greed” threshold of 80. The index had exceeded 90 in March when Bitcoin previously reached its all-time high.
“While market enthusiasm hasn’t reached the level of mania,” said Joo Ki-young, CEO of CryptoQuant, “Bitcoin prices at the end of next year might not be significantly different from current levels. Investors should exercise caution in this period.”
M. H. Lee (mhlee@koreabizwire.com)
