South Korean Bitcoin market saw its highest “kimchi premium” point this year reaching 9.7% on Monday April 11. Worldwide cryptocurrency markets show a major price decline as Bitcoin follows below $92,000 and Ethereum falls by 20 percent.
Despite the broader market slump, the premium on South Korean exchanges remains elevated, highlighting strong local demand.
Kimchi premium reflects high local buying pressure
Kimchi premium describes the difference in price between South Korean exchanges and international market trading. When Korean retail investors observe an increase in premium rates of the kimchi premium they engage in more intensive buying behavior. South Korean crypto exchange trading is heavily restricted for foreign investors which causes scarce arbitrage opportunities between market prices. Domestic and global market prices do not match due to this phenomenon.
Market conditions contributing to the premium surge
Market experts confirm that the premium price for kimchi boosts in market upturns since Korean traders influence it upward. Heavy market sell-offs by Korean investors create premium spikes because they differ in trading behavior from international investors. The current price boost in the cryptocurrency market happens at a time when global traders are dumping their crypto assets suggesting that South Korean investors steadily support their purchases.
The premium on kimchi dropped to 8.2% at this writing per CryptoQuant data. The premium currently stands at 8.2% although it has shown some descent from its maximum recorded earlier during the day.
Bitcoin: Korea Premium Index (Source: CryptoQuant)
Analyst predictions on future trends
Presto Research analyst Min Jung suggested that the kimchi premium would remain high as long as kimchi market sales stay intensively negative in U.S. markets. For historical purposes the index has demonstrated an average of 5% across all measurements. When Bitcoin market stability resumes along with recovery it will bring back the normal rate of premium.
The recent surge in South Korea’s premium index indicates a divergence in investor sentiment between local and international markets. With global uncertainties affecting crypto prices, the behavior of South Korean investors will continue to play a key role in shaping price movements on domestic exchanges.