Bitcoin price is currently trading on South Korean crypto exchanges at a significant premium – more than $ 6,000 per coin in USD equivalent. In the past, however, this so-called “Kimchi Premium” signaled the end of the bull trend.
Is this a sign that things are about to get bearish in the crypto market? Or is there something else going on with the US dollar and the South Korean won that is causing the discrepancy?
Bitcoin FOMO is reaching a boiling point in South Korea, according to the price premium
Bitcoin is an asset that is second to none. There is no such thing as a company like stocks. no country like fiat currencies; nor does it have a physical form like a commodity.
With decentralized cryptocurrency technology not being controlled by any state actor, the underlying asset could one day become the first non-state global reserve currency.
Related reading | Math puzzle: why did the bitcoin rally stop at the golden ratio?
However, like these other assets, the crypto market is also traded globally and is subject to variances in price data depending on how aggressively a region’s currency is exchanged to buy up BTC.
Once again, Crypto FOMO has prevailed in South Korea, which led to the return of the so-called “Kimchi Premium”.
The Kimchi Premium has Bitcoin priced nearly $6,000 higher in South Korea | Source: BTCUSD on TradingView.com
The return of the Kimchi Premium could jeopardize the ongoing Crypto Bull Run
The table above shows the considerable discrepancy between BTCUSD and BTCKRW. The discrepancy is around 6,000 USD currency and is increasing. The crypto community has called this unusual phenomenon “Kimchi Premium”.
Related reading | Heads Up: Bearish Bitcoin’s technical pattern shouldn’t be shaken off
It is not clear what causes such a FOMO among South Korean investors, but the so-called premium has ceased to exist since the last week of 2017.
The last time the Kimchi Premium was so prominent, it was the peak of the last bull market. | Source: BTCUSD on TradingView.com
The last time the Kimchi Premium moved away from the standard BTCUSD ticker in US dollars was the grand finale for the previous bull market.
While the USD trading pair made lower highs, the KRW trading pair made another higher high before collapsing into the 2018 bear market. So far, the premium has never been used as a signal to act as it has not appeared often enough in the past for action to be taken.
But its existence cannot be denied, nor what was so far apart in the past according to the Bitcoin price tickers of the two countries. Whatever the case, special attention should be paid to the Kimchi Premium in the near future.
Featured image from Deposit Photos, Charts from TradingView.com