According to CryptoQuant data, South Korea’s Bitcoin Kimchi Premium has surged to a three-year high of 12% despite the top BTC’s sharp decline to $95,000.
This premium reflects a growing price gap between local and global markets, with South Korean traders paying significantly more for BTC than their international counterparts.
Graph showing the Bitcoin Kimchi Premium from Jan. 20 to Feb. 3, 2025 (Source: CryptoQuant)
The Kimchi Premium appears during periods of strong demand in South Korea’s crypto market, but its persistence often signals more profound structural constraints.
The Asian country’s strict capital controls prevent the easy movement of funds across borders, limiting arbitrage opportunities. The absence of a crypto futures market in South Korea also plays a role, as global downturns are often worsened by cascading liquidations, which do not occur in the country.
Additionally, the market is primarily driven by retail investors rather than institutions, which means large-scale sell-offs are less common.
Table showing Bitcoin’s Price on Korean and Global Exchanges on Feb. 3, 2025 (Source: Coinpan)
CryptoQuant’s CEO Ki Young Ju suggested that the recent surge in the Kimchi Premium is not driven by Korean traders rushing to buy Bitcoin at lower prices. Instead, BTC is being converted into USD rather than the Korean won, indicating that fewer traders are cashing out into local fiat.
This trend suggests that capital outflows, rather than increased demand, may be fueling the widening premium.
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