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Kimchi Premium in South Korea shifts to Discount

As South Korea's "Kimchi premium" has changed back to a discount, it is now less expensive to purchase cryptocurrencies like Bitcoin on local exchanges.

Kimchi, a traditional Korean food, inspired the phenomenon's name. The term "Kimchi premium" describes situations in which the price of Bitcoin is greater on South Korean exchanges than it is in other markets.

BTC is currently selling at about $24,464 on Coinbase and $24,487 on Binance, according to statistics from CoinMarketCap.

In contrast, one of the biggest exchanges in South Korea, Upbit, has it listed at $24,405, as does the Korean exchange Bithumb.

It's the same situation for the second largest crypto by market cap, Ethereum
At time of writing, data on CoinMarketCap shows Coinbase has listed ETH at roughly $1,687 and Binance has it at $1,691, while Bithumb has listed ETH at $1,682 and Upbit at $1,683.
Some traders try to profit by trading the price differences between various exchanges, a practice known as arbitrage.

The amount of the Kimchi premium has historically been correlated with news, with large drops being observed whenever negative news regarding South Korean cryptocurrency exchanges is reported.

As the South Korean government declared it would crack down on bitcoin trade at the start of 2018, the premium vanished.

According to research published in 2019 by the University of Calgary, the Kimchi Premium first appeared in 2016.

From January 2016 and February 2018, South Korean Bitcoin exchanges reportedly charged an average of 4.73% more than their US counterparts.

February 2023 , CryptoniteUae