South Korea Elected A Bitcoin-friendly President, Will Bitcoin See Another Kimchi Premium This Year?
2022-03-18 10:51:05
How Much Is Bitcoin Right Now In South Korea
On March 10th, the leader of South Korea’s People Power Party, Yoon Suk-yeol, was elected the new president of South Korea. This presidential election was one of the most contested in the history of South Korea. Yoon only won by less than a 1 percentage point margin against his left-wing rival, the Democratic Party candidate Lee Jae-myung.
Yoon, a 61-year-old former prosecutor who helped imprison two former presidents on corruption charges, had eagerly reached out to cryptocurrency investors and professionals with campaign promises to win support from younger voters.
A recent survey showed that 4 out of 10 South Koreans between the ages of 20 and 30 own crypto, while the total trading volume of crypto in the country exceeds that of the KOSPI stock exchange. Another data showed that there is an estimate of 8.4 million people that hold cryptocurrencies in Korea, and more than 60% of them are in their 20s and 30s.
Yoon promised to create a new state agency called the Digital Industry Promotion Agency which would be tasked with leading and monitoring the crypto and NFT industry. He also pledged to raise the threshold for paying capital gains tax on earnings from Bitcoin and other cryptocurrencies from $2,000 to $40,000. If implemented, South Korea could have one of the world’s most generous tax-free allowances for Bitcoin.
South Korean Creates Kimchi Premium for Bitcoin
South Korea has become a popular market for cryptocurrencies including Bitcoin trading. Not only the young generation, but also the ajusshi and ajumma, which is Korean for older men and women, have gone in early. Interestingly, these ajusshis and ajummas are willing to pay higher prices in the hope that the Bitcoin price will continue to rally. This has given rise to the peculiar “Kimchi Premium''.
“Kimchi” refers to the fermented cabbage dish that is a staple in Korean cuisine. Therefore, Kimchi Premium is used specifically to represent the gap in cryptocurrency prices in South Korean exchanges compared to other exchanges located globally.
As the Kimchi Premium is predominantly seen in the price of Bitcoin. In other words, BTC might be listed at a higher price on a South Korean exchange such as Upbit than an exchange located in other areas such as Binance, Coinbase and Gate.io.
According to a report by the University of Calgary, the Kimchi Premium first appeared in 2016. The same report shows that between early 2016 to early 2018, the average level of this premium was nearly 4.80% and the highest level appeared in January 2018 with nearly 55%.
Last year, the Kimchi Premium resurfaced. In the first month of 2021, the price of Bitcoin hit two-year highs on South Korean exchanges. It was reported that the price gap was approximately more than 6% on January 4th, 2021 when comparing the country's largest crypto exchange Upbit and Binance.
This means traders could have profited by 6% from the difference in Bitcoin prices by purchasing Bitcoins on Binance and selling their position on Upbit by timing a trade precisely.
As of March 16, there is no indication for the reappearance of a new Kimchi Premium. Bitcoin price live on Upbit is 50,334,000 KRW, which is 40540.44 USD, while it is 40802.01 USD on Gate.io. Yoon Suk-yeol’s single five-year term as president will begin in May. Will he introduce the cryptocurrency policies he promised during the campaign after his inauguration? And will these policies inspire a new round of Kimchi Premium?
On March 10th, the leader of South Korea’s People Power Party, Yoon Suk-yeol, was elected the new president of South Korea. This presidential election was one of the most contested in the history of South Korea. Yoon only won by less than a 1 percentage point margin against his left-wing rival, the Democratic Party candidate Lee Jae-myung.
Yoon, a 61-year-old former prosecutor who helped imprison two former presidents on corruption charges, had eagerly reached out to cryptocurrency investors and professionals with campaign promises to win support from younger voters.
A recent survey showed that 4 out of 10 South Koreans between the ages of 20 and 30 own crypto, while the total trading volume of crypto in the country exceeds that of the KOSPI stock exchange. Another data showed that there is an estimate of 8.4 million people that hold cryptocurrencies in Korea, and more than 60% of them are in their 20s and 30s.
Yoon promised to create a new state agency called the Digital Industry Promotion Agency which would be tasked with leading and monitoring the crypto and NFT industry. He also pledged to raise the threshold for paying capital gains tax on earnings from Bitcoin and other cryptocurrencies from $2,000 to $40,000. If implemented, South Korea could have one of the world’s most generous tax-free allowances for Bitcoin.
South Korean Creates Kimchi Premium for Bitcoin
South Korea has become a popular market for cryptocurrencies including Bitcoin trading. Not only the young generation, but also the ajusshi and ajumma, which is Korean for older men and women, have gone in early. Interestingly, these ajusshis and ajummas are willing to pay higher prices in the hope that the Bitcoin price will continue to rally. This has given rise to the peculiar “Kimchi Premium''.
“Kimchi” refers to the fermented cabbage dish that is a staple in Korean cuisine. Therefore, Kimchi Premium is used specifically to represent the gap in cryptocurrency prices in South Korean exchanges compared to other exchanges located globally.
As the Kimchi Premium is predominantly seen in the price of Bitcoin. In other words, BTC might be listed at a higher price on a South Korean exchange such as Upbit than an exchange located in other areas such as Binance, Coinbase and Gate.io.
According to a report by the University of Calgary, the Kimchi Premium first appeared in 2016. The same report shows that between early 2016 to early 2018, the average level of this premium was nearly 4.80% and the highest level appeared in January 2018 with nearly 55%.
Last year, the Kimchi Premium resurfaced. In the first month of 2021, the price of Bitcoin hit two-year highs on South Korean exchanges. It was reported that the price gap was approximately more than 6% on January 4th, 2021 when comparing the country's largest crypto exchange Upbit and Binance.
This means traders could have profited by 6% from the difference in Bitcoin prices by purchasing Bitcoins on Binance and selling their position on Upbit by timing a trade precisely.
As of March 16, there is no indication for the reappearance of a new Kimchi Premium. Bitcoin price live on Upbit is 50,334,000 KRW, which is 40540.44 USD, while it is 40802.01 USD on Gate.io. Yoon Suk-yeol’s single five-year term as president will begin in May. Will he introduce the cryptocurrency policies he promised during the campaign after his inauguration? And will these policies inspire a new round of Kimchi Premium?
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