Bitcoin is up this month but there’s one place where it’s more significantly more expensive: South Korea.
The so-called Kimchi Premium — when bitcoin costs more on Korean exchanges — is back as retail investors pile back into the coin. Bloomberg first reported the news and CoinGecko data shows that bitcoin’s price is nearly 1% higher on Upbit, Korea’s biggest exchange, than Binance.
Named after a popular dish in the Asian nation, the phenomenon comes down to Korea’s market being partly walled off. Prices have historically run higher there because of strong local retail demand combined with strict capital controls and trading regulations.
As a result, the Bitcoin/won trading pair is more common in South Korea compared to the Bitcoin/U.S. dollar pair in other places. When there is demand for the asset, it will naturally be higher in the country as compared to other places.
The phenomenon has been described as a retail FOMO indicator, since Korea has few notable crypto funds and tight capital controls. The premium has reached as high as 21.5% in 2022.
Bitcoin was recently trading for $78,287, unmoved over the past 24 hours. It’s also at the same price it was seven days ago, but over the past month, the coin has rallied by 24%.
The price of the biggest digital asset started surging after the U.S. Treasury in August said it would at least double the size of its liquidity-support buyback operations. The announcement hurt the dollar but non-yielding assets like bitcoin and gold have benefited.
President Donald Trump also said the same week that the long-awaited crypto Clarity Act was an important piece of legislation, and urged lawmakers to get it over the line.
Crypto industry bigwigs have been calling for clear rules for distinguishing between digital assets that are securities, commodities or payment stablecoins, and news that regulators will soon have such a framework has typically benefited crypto markets.
Speculators are now betting on Polymarket that there’s a 59% chance bitcoin will be above $82,500 this month, leading some to call an end to the bear market.