Bitcoin hits $68,000 in South Korea
While Bitcoin’s price is hovering around $59,000 on global markets, the leading digital asset is trading for over $68,000 in South Korea.
Earlier today, the Bitcoin/Korean won pair on Bithumb and Korbit, two of the country’s largest exchanges was 77,393,000 Korean won. This is equivalent to $68,853.
The difference of nearly $10k is called the Kimchi Premium, which refers to the price difference between western-based crypto exchanges and South Korean counterparts.
For the uninitiated, the Kimchi Premium happens when South Korean exchanges do not have enough digital assets to meet the surging demand. The major reason for this is the country’s recent crackdown on crypto exchanges that have restricted capital flows.
Recall that leading crypto exchange Binance shut down its South Korean office a few months ago due to stiffening government policies.
South Korean regulators have made it difficult for citizens to send the country’s national currency, the won, to other countries. Due to this difficulty, exchanges are often plagued with a backlog of demand, which temporarily pumps the price of Bitcoin.
Comparatively, this year’s Kimchi Premium of about 15% is significantly lower than the massive premiums seen in May 2017 and January 2018 when prices surged by 63% and 47%, respectively.
For clarity, the Kimchi Premium can also fall to a discount. In this case, Bitcoin would sell cheaper in South Korea than anywhere else. This happened in early 2018, when Bitcoin crashed from its then all-time high of nearly $20k.