The Kimchi Premium in South Korea reached its highest level in 27 months, hitting 10.32% for Bitcoin on Wednesday in Asia, as reported by CryptoQuant data.
The Kimchi Premium represents the price difference of cryptocurrency tokens between South Korea and other global markets. CryptoQuant compares the price of bitcoin in South Korea with that in the USD market.
Distinct factors in South Korea’s crypto market contribute to cryptocurrency prices differing from those in other regions. Local regulations effectively block foreign investors from trading on South Korean exchanges.
Korean investors engaging in arbitrage, buying crypto from foreign exchanges, may face penalties under the country’s Foreign Exchange Transactions Act.
CryptoQuant data shows that the Korea Premium index rose from 5.19 on February 28 to 6.84 on March 5. This increase coincided with Bitcoin reaching a new all-time high of over $69,200 on March 5, attributed to ongoing investments in Bitcoin ETFs in the US.
South Korea lacks Bitcoin ETFs, unlike the US, resulting in limited institutional involvement. Consequently, individual investors purchasing on South Korean exchanges have primarily driven up prices.
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