After a brief pullback to $60,000 on Wednesday, the world’s largest cryptocurrency Bitcoin (BTC) has given a healthy recovery. The Bitcoin (BTC) price is up 4% in the last 24 hours shooting past $66,000 once again.
In a recent statement, CryptoQuant CEO Ki Young Ju revealed that Bitcoin’s price premium in South Korea has reached an impressive 10%, marking its highest level in two years. Ju highlighted the resurgence of Korean retail investors in the cryptocurrency market, indicating a renewed interest and confidence among local traders.
The Kimchi premium refers to the variance in cryptocurrency asset prices between South Korean exchanges and those abroad. This premium has been on an upward trajectory alongside the BTC price since the beginning of February.
According to on-chain data from CryptoQuant, the Korea Premium index surged from 5.19 on February 28 to 6.84 on March 5. This increase occurred simultaneously with Bitcoin reaching a new all-time high surpassing $69,200 on March 5, attributed to ongoing investments in Bitcoin ETFs in the United States.
Unlike the US, there are still no Bitcoin ETFs in South Korea to witness strong institutional participation. As a result, retail spot buying has been majorly driving up prices on the Korean exchanges.
In December 2017, amid BTC’s bullish surge, South Korean exchanges were trading Bitcoin at nearly 50% higher prices compared to most global exchanges. As a result, CoinMarketCap had to delist some Korean exchanges due to “significant price disparity from the global average”.
Similarly, during the 2021 bull run, the Kimchi premium reached its peak at 21.56% on May 19, coinciding with Bitcoin’s price exceeding $36,000 before eventually reaching its previous all-time high in November 2021.
South Korea, recognized for its tech-savvy populace, is considering the possibility of approving Bitcoin Spot ETFs. As per a recent report, Lee Bok-hyun, the governor of the Financial Supervisory Service, mentioned in a radio interview that authorities are currently discussing the legalization of Bitcoin Spot ETFs in the country.
However, the classification of BTC as an underlying asset remains a significant concern for South Korean regulators. While financial authorities in January expressed no plans to regulate Bitcoin ETFs, the sale of spot Bitcoin ETFs by brokerages raised queries under the Capital Markets Act.
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