South Korea is known for a voracious crypto appetite, but the “Kimchi Premium” may now be turning into a discount. Crypto prices on Korean exchanges are now slipping below the worldwide average, indicating that Korean markets might finally be cooling down.
Bithumb, one of the leading South Korean exchanges, is currently reporting a Bitcoin price of $3615 at the time of writing, according to CoinMarketCap- slightly below the global average of $3,667. The price on Upbit is $3,652, and on Coinone it’s $3,611.
Other major currencies are reflecting the same trends. On UpBit, XRP is now trading for $0.3254, a hair less than the worldwide price of $0.3279. Ethereum is also on sale, for $121.52 – nearly a 1% discount from the global average.
Hungry Market Has Eaten Its Fill
The decline appears to be part of a long-term decline in Korean demand for cryptocurrency. In their November Exchanges Report, CryptoCompare noted that trades into the Korean Won accounted for 50% of all fiat-crypto volume. But now, the market monitor says in the December report, “trading into the Korean Won decreased significantly since the previous month.”
Some of November’s high volume could be attributed to “special events” by Korean exchanges, designed to boost throughput and trading in the markets. According to CryptoCompare, the high numbers “appear to follow from their [Bithumb’s] ‘Super Airdrop Festival’ (1, 2, and 3) and ‘Special Gift’ promotional events.”
According to the latest report, trades in the Korean currency fell by 78% from November, while volumes in other currencies grew. The Japanese market showed the greatest rise, with an increase of 28%.
Crypto Goes (Even More) Global
The data are a stark contrast to figures from last year, when South Korean markets saw trades of up to 17% higher than worldwide prices. On Bithumb, one of the largest Korean markets, Bitcoin traded for over a thousand dollars higher than average prices, as Crypto Briefing reported in August. For those with access to Korean and global banking, the difference could have provided an easy opportunity for arbitrage.
Part of the decline may be attributed to enforcement actions from the South Korean authorities, who have largely followed the lead of the US Securities and Exchange Commission. Another possibility is that the hottest market for Bitcoin and other cryptocurrencies is finally feeling the chill.
If winter is only just starting to hit Korea, that may be a sign of more snowstorms ahead.
The author has investments in Bitcoin, Ethereum and XRP, which are mentioned in this article.