South Korea’s bitcoin 'kimchi premium' soars to 10-month high amid Trump-led tariff war concerns

Quick Take

  • South Korea’s bitcoin kimchi premium hit over 9% on Monday in Asia, a 10-month high.
  • One analyst said kimchi premium can be seen during periods of panic selling when selling pressure is lower on South Korean exchanges.

South Korea’s bitcoin kimchi premium hit a 10-month high as bitcoin on South Korean exchanges remained relatively steady amid a broader crypto sell-off.

According to data from CryptoQuant, kimchi premium hit 9.7% for bitcoin at around 2 a.m. on Monday in South Korea. This marks the highest South Korean premium since April 14, 2024, when the premium rose above 13%. It has since moved down to 8.24% at the time of writing.

Kimchi premium refers to the price percentage gap when bitcoin (or other cryptocurrencies) is trading higher in South Korean exchanges than elsewhere. 

Such premium stems from the South Korean crypto market being closed off to foreign investors, while local investors who buy large amounts of crypto from foreign exchanges for arbitrage may be punished under capital controls regulations. 

“The Kimchi Premium typically rises in bull markets when Korean investors bid higher, but it can also spike during periods of panic selling,” said Presto Research Analyst Min Jung. “This occurs when selling pressure is lower on Korean exchanges compared to global markets.”

Over the weekend, U.S. President Donald Trump announced severe tariffs on imported goods from Canada, Mexico and China, resulting in growing concerns from investors about a prolonged “trade war” and its subsequent impact on U.S. inflation.

The crypto market saw over $2.1 billion in liquidations in the past 24 hours, according to Coinglass data.

“If selling pressure among US investors persists, the premium could remain elevated,” Jung said. “However, historically, the Kimchi Premium has averaged around 5%. If the market stabilizes and rebounds, we would likely see the premium narrow back toward that level.”

Though local regulations are comparatively stricter, South Korea hosts one of the most active crypto markets in the world, with a heavy focus on altcoin trading. 

According to The Block’s data dashboard, South Korea’s Upbit was the fourth-largest centralized exchange by monthly volume, processing over $187 billion in transactions in January.


Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.

© 2024 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Danny Park is an East Asia reporter at The Block writing on topics including Web3 developments and crypto regulations in the region. He was formerly a reporter at Forkast.News, where he actively covered the downfall of Terra-Luna and FTX. Based in Seoul, Danny has previously produced written and video content for media companies in Korea, Hong Kong and China. He holds a Bachelor of Journalism and Business Marketing from the University of Hong Kong.

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