[NEWS] "Kimchi premium" emerges in Korea; temporarily exceeds $70,000 in dollar terms

Investment in crypto assets (virtual currencies) is becoming more active in Korea. On the 7th, Bitcoin (BTC) was trading at around $67,000 (approximately JPY 9.9 million) on crypto exchanges in many countries, but in Korean crypto exchanges it was trading at around $72,000 (approximately JPY 10.65 million) in dollar terms.

The price discrepancy between crypto exchanges in Korea and other countries is commonly known as the "Kimchi Premium," and has long been a phenomenon in the crypto market.

In Korea, foreigners are effectively restricted from buying and selling due to capital controls. Therefore, this price discrepancy is also an indicator of increased demand from individual investors in Korea.

Ki Young Ju of CryptoQuant, which performs on-chain analysis, pointed out on X (formerly Twitter) that "Korean individual investors are returning." Yoon-ju cited the Korea Premium Index, which indexes the difference in Bitcoin prices between Korean and other countries' cryptocurrency exchanges, and reported that the premium is at 10%, the highest in the past two years. The higher this figure, the more active individual investors are in investing.

Korea: High Interest in Cryptocurrency Investment

Korea is known for its citizens' high interest in cryptocurrency. In recent years, the country has introduced a licensing system for cryptocurrency exchanges, and is scheduled to implement a law focusing on investor protection in July of this year, showing its commitment to market development.

The background to the increased investment by individual investors in Korea is largely due to the existence of Bitcoin spot ETFs approved in the United States.

In January of this year, the Financial Services Commission (FSC) recommended a ban on Korean securities companies handling US Bitcoin spot ETFs, citing the possibility of violating regulations.

However, there have been suggestions since then that regulations will be reviewed, including allowing Bitcoin spot ETFs to be handled in Korea as well.

In addition, the recent price rise has accelerated FOMO (fear of missing out), which has also boosted investment in Bitcoin.

The ruling party includes review of cryptocurrency regulations in its campaign pledges

In addition, the Korean ruling party, People's Power, has included cryptocurrency-related measures in its manifesto for the general election scheduled for April this year. This may have also spurred the movement.

The series of pledges include reviewing regulations on Bitcoin spot ETFs, IEOs, and corporate cryptocurrency investments, which is a very positive move for Korean cryptocurrency users.

In addition, it has proposed postponing the cryptocurrency tax, which is scheduled to be implemented in January 2025, which may further accelerate investment in cryptocurrency.

Reference: Posted by Yoon-ju
Image: Shutterstock

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