Bitcoin 'Kimchi Premium' Fades Amid South Korean Exchange Crackdown, Price Sell-Off

The premium measures the spread between bitcoin's price on Korean exchanges and other venues.

AccessTimeIconApr 23, 2021 at 11:20 a.m. UTC
Updated Sep 14, 2021 at 12:45 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

South Korea's crypto mania looks to have cooled amid the government's renewed crackdown on cryptocurrencies and bitcoin's price slide.

  • According to data provided by the South Korea-based analytics firm CryptoQuant, bitcoin's Kimchi premium, a gauge of retail frenzy in South Korea, has declined to 2% from the lofty 20.6% observed on Sunday.
  • The Kimchi premium is a widely tracked indicator that measures the spread between bitcoin's price on Korean exchanges and other venues. The market discrepancy results from South Korea's capital controls and regulations limiting foreign investors from trading on domestic exchanges.
  • South Korea announced on Monday a special enforcement period from April to June to target all "illegal activity involving virtual assets".
  • The move comes a month after the Financial Services Commission's (FSC) warned crypto investors to "check the registration status" of exchanges and trade with those that have long-term sustainability.
  • Aside from regulatory developments, bitcoin's 25% drop from record highs above $64,000 reached on April 14 may have taken the wind out of frenzied action on Korean exchanges.
  • The Kimchi Premium turned positive in mid-February and rose sharply in March and early April as bitcoin broke above $60,000 in the days leading to Coinbase's debut on Nasdaq on April 14.
Bitcoins Korea premium
Bitcoins Korea premium

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.