- Traders are buying BTC and ETH on South Korean exchanges at a lower price.
- Due to a fall in crypto sentiment in the nation, the price of cryptos have dipped.
- By buying low here and selling high elsewhere, traders are taking profits.
The crypto market seems to have gotten a surprise present today in the South Korean market. Presently, due to a flip of crypto market sentiment in South Korea, Bitcoin (BTC) and Ether (ETH) can be bought at a discounted price in South Korean exchanges.
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In detail, the “Kimchi premium”, which refers to the higher price of Bitcoin on South Korean exchanges compared to other markets, has now turned into a discount, making cryptocurrencies cheaper to buy in South Korea.
According to the tweet above, it is likely that this shift took place due to a decline in interest in crypto from Korean retail investors. Atleast, this is the sentiment observed by Doo Wan Nam, the COO of Stablenode.
At the moment, the price of BTC and ETH varies between South Korean crypto exchanges such as Bithumb and Upbit. Wherein, the price of the assets is lower compared to their prices in CoinMarketCap and Coinbase.
A 2019 paper from the University of Calgary showed that South Korean Bitcoin exchanges charged an average of 4.73% more than their US counterparts between Jan 2016 and Feb 2018.
This indication of low interest may be a downside to the crypto market, although to seasoned traders, it is just another opportunity to buy low and sell high across a variety of crypto exchanges.
Since some traders use arbitrage to profit from price differences between exchanges, the Kimchi premium has previously been linked to news and has disappeared in the past when the South Korean government announced its plans to regulate cryptocurrency trading.
No doubt, the republic is working hard to set clear regulations to better regulate the use of crypto and provide valuable services. The pressure is certainly high for the nation so they can work to avoid events such as the Terra Luna fiasco once again.
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