Bitcoin experiences price recovery: Kimchi premium at all-time high!

Bitcoin experiences price recovery: Kimchi premium at all-time high!

Bitcoin is witnessing a strong price rally, accompanied by a notable rise in the “Kimchi premium” making its appearance once again. Demand for Bitcoin in South Korea remains consistently high. The “Kimchi Premium” reflects the price difference of cryptocurrencies, especially Bitcoin, between South Korean and international exchanges. This effect results from the strict capital controls in South Korea, which cause delays in price development. The Kimchi Premium Index recently hit a new all-time high, indicating continued investment activity by retail investors in South Korea.

After Bitcoin reached new highs, Kimchi premium also recorded a significant increase. According to data from cryptocurrency data provider Cryptoquant, on March 16, the Korea Premium Index reached 10.88 percent, its highest level since May 2021. At that time, the trading price of Bitcoin in South Korea was about 10 percent above the global spot price. Shortly thereafter, the premium reached a new all-time high of over $73,000 on March 13th. Since then, the price of the digital currency has fallen back below the $70,000 mark.

In early March, Sam Bankman-Fried, founder of FTX, was sentenced to 25 years in prison for crypto fraud. In 2017, Bankman-Fried exploited arbitrage opportunities in price gaps between different exchanges, with differences of up to 60 percent. Due to the significantly higher prices in South Korea, he founded Alameda Research to devote himself intensively to Bitcoin trading. Bankman-Fried was able to make significant profits, sometimes making up to a million US dollars a day. In an interview with CNBC, the then 30-year-old billionaire said he was drawn to the industry's diverse arbitrage opportunities because they were "too good to be true."