South Korea’s “kimchi premium” — an indicator showing the spread between cryptocurrency prices on global exchanges and the Asian country — has fallen into bearish territory for the first time since Jan. 18.
This suggests that it is cheaper to buy digital assets such as bitcoin on South Korean platforms than on Binance or other leading platforms, which usually means that local user interest has diminished.
Kimchi Premium enters the discount area
“Kimchi Premium” — a phenomenon named after a traditional Korean dish — has turned bearish, showing a divergence in the valuation of major cryptocurrencies on local and global exchanges.
1 bitcoin is currently trading at around $24,655 on Bithumb, $24,650 on Korbit, $24,939 on Binance and $24,850 on Coinbase. Figures for Upbit ($24,700) and Coinone ($24,648) are also lower.
Analytics platform CryptoQuant shows the volatility of this indicator over the past month. On most days, the price of BTC on South Korean platforms is relatively higher than on platforms outside the East Asian country, which usually indicates increased local investment interest in the asset.
Source: CryptoQuant
Looking at the chart representing the past few years, it can be noticed that “Kimchi Premium” has been bearish in late 2020 and early 2021 (when BTC was in a bull market). The indicator entered similar territory back in November 2022 (when the entire cryptocurrency market was roiled by the FTX crash).
Source: CryptoQuant
Binance returns to South Korea
It was recently reported that the world’s largest cryptocurrency exchange is looking to buy a 41.2% stake in Gopax, one of South Korea’s leading digital asset platforms, to re-enter the local market. Gopax ceased operations in November due to unfavorable macroeconomic conditions.
Binance reportedly closed the deal nearly two weeks ago, using funds provided by its $1 billion industry recovery plan. CEO Changpeng Zhao (CZ) believes his exchange’s return to the region could “restructure the South Korean cryptocurrency and blockchain industry.”
Binance sales manager Yibo Ling outlined the deal’s main goals as creating “fundamental momentum” among domestic consumers and “ensuring that any customer has the ability to withdraw their funds, their possessions.”
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board pass
According to CryptoPotato
