The latest data reveals that the premium on bitcoin in South Korea has escalated to its highest level in more than two years. At 7:30 a.m. Eastern Time (ET) on Thursday, the weighted global average price for bitcoin hovers between ,800 and ,000, whereas on the South Korean exchange Upbit, bitcoin’s price stands at ,076 […]
Bitcoin News
Bitcoin’s Swift Climb Triggers Soaring Premium in South Korea During Worldwide Rally
On Wednesday, bitcoin’s value ascended past the K threshold, peaking at a 24-hour high of ,389 by 10:45 a.m. (ET). Concurrently, South Korea observed a pronounced premium over the international exchange rate, with local platforms such as Upbit and Bithumb displaying prices that are ,251 higher. In a Worldwide Bitcoin Frenzy, South Korea and 30+ […]
Bitcoin News
Strategic Exploit: Crypto Traders Harvested $3 Billion From ‘Kimchi Premium’?
South Korea’s local media, Newsis, recently reported the case of certain crypto traders who had sent about billion overseas in a bid to profit from the ‘Kimichi Premium.’ Interestingly, the court found 14 out of 16 of these traders not guilty despite their alleged actions.
How This Group Of Crypto Traders Operated
These crypto traders are said to have sent these sums of money through local banks under the guise of these transactions being foreign exchange remittances. However, this was allegedly not the case, as they would then use the funds to purchase virtual currencies abroad and send those crypto assets back to domestic exchanges, where they eventually offload them.
This was done to allegedly profit from the ‘Kimichi Premium.’ This phenomenon occurs when crypto assets are more expensive in South Korea than overseas due to the country’s particular regulations.
This has created an arbitrage opportunity that crypto traders have sought to exploit. Meanwhile, the Korean government has tried to prevent traders from doing so.
That is why the prosecution charged 16 people, including someone referred to as Mr. A in the news report, with violating the Specific Financial Information Act. Mr. A and others were accused of illegally transferring foreign currency worth 4.3 trillion won ( billion) overseas between April 2021 and August 2022 to exploit the Kimichi premium allegedly.
The prosecution believes these crypto traders made a market profit of as much as 210 billion won (8 million). In their defense, the defendants argued against any wrongdoing since they weren’t precisely the ones facilitating the foreign exchange business but the bank.
The traders argued they were platform users, not virtual asset business operators. The bank involved also tried to absolve itself from the case as it claimed it carried out the transaction based on the “false evidence” the defendants submitted.
Court Finds The Defendants Not Guilty
The court agreed with most defendants’ arguments, acquitting 14 (including Mr. A) out of the 16 persons charged. A local Judge who ruled over the case opined that their actions didn’t violate the objective of the Foreign Exchange Transactions Act and, therefore, could not be punished under that law.
The Judge added that there was “nothing to suggest that the defendants operated as virtual asset business operators.” If the reverse was the case, they could have been punished for not registering their business or making certain disclosures as required by the law.
Interestingly, Judge Park further distinguished the current case from a Supreme Court precedent as he noted that the highest court did not “explicitly judge the issues in this case.” The prosecution already submitted an appeal, dissatisfied with the court’s ruling.
Chart from Tradingview
Bitcoin Coinbase Premium Is Negative: What It Means For Price Recovery
Data shows the Bitcoin Coinbase Premium Gap is currently negative. Here’s what this could mean for the asset’s recent attempt at recovery.
Bitcoin Coinbase Premium Gap Has Been Deep Red Recently
An analyst in a CryptoQuant Quicktake post pointed out that the Coinbase Premium Gap has been negative recently. The “Coinbase Premium Gap” here refers to an indicator that tracks the difference between the Bitcoin prices listed on cryptocurrency exchanges Coinbase (USD pair) and Binance (USDT pair).
When the value of this metric is positive, it means that the price listed on Coinbase is greater than that on Binance right now. Such a trend implies that the former platform is currently witnessing a higher buying pressure or a lower selling pressure than the latter.
On the other hand, the negative indicator suggests Coinbase is witnessing relatively high selling pressure as the price listed here is lower than on Binance.
Now, here is a chart that shows the trend in the Bitcoin Coinbase Premium Gap over the last few years:
As displayed in the above graph, the Bitcoin Coinbase Premium Gap has plunged into negative values recently, implying that the selling pressure on Coinbase has risen.
Earlier, the metric had a notable positive streak, and this run coincided with a rally in the cryptocurrency’s price. The asset fell as the indicator flipped towards red, suggesting increased selling pressure may have contributed.
US-based institutional investors commonly use Coinbase, while Binance has a more global audience. As such, the Premium Gap can provide hints about American whales’ buying or selling behavior.
It would appear that these institutional players were buying during the recent rally, but as soon as they switched towards selling, the price suffered for it. The last bull market also saw significant buying pressure from these investors, while the bear market saw the indicator restricted to negative or neutral levels.
Bitcoin has been trying to recover from its recent drawdown, but from the chart, it’s apparent that the Coinbase Premium Gap is still at deep red values.
Thus, the fact that large American investors are falling behind in buying pressure may not bode well for this recovery attempt if the recent pattern followed by the metric is anything to go by.
BTC Price
Since the visit below the ,000 level, Bitcoin has seen a notable rebound below the ,000 mark. The chart below shows how the coin has performed over the past month.
This recovery has stood so far, but given the negative Coinbase Premium Gap, the cryptocurrency may encounter some resistance soon.
GBTC Discount Narrows to Zero; Experts Say Return of Premium to NAV Is a Possibility
The recently disappeared GBTC discount may be “a sign of industry maturing and the improved enterprise acceptance of bitcoin.” While some see the disappearance of the discount as pointing to the re-emergence of the premium to the net asset value (NAV), one expert said he sees “the continued parity or even a resurgence of the discount” as real possibilities.
The Impact of Spot Bitcoin ETF Approvals
On or around January 26, the discount to the net asset value (NAV) of the Grayscale Bitcoin Trust (GBTC) narrowed to zero for the first time in nearly three years. Since descending to 44% in June 2023, the discount has gradually shrunk and by Dec. 20, 2023, it had reached the single-digit figure of 7%.
According to Ycharts data, the last time the discount to the NAV was around zero was sometime around February 21, 2021. The gradual disappearance of the GBTC’s discount to NAV has been attributed to many factors including the spot bitcoin exchange-traded funds (ETF) approval speculation that gripped the crypto market for much of the second half of 2023.
Meanwhile, the disappearance of the discount has prompted some to predict the imminent return of the premium to the NAV. Others, however, have warned that this return to a premium is not a given because crypto assets like bitcoin are still volatile. They argue that the approval of spot bitcoin exchange-traded funds (ETF) alone will not change that.
Nevertheless, some experts, such as Mant Hawkins, the Core Contributor at Andromeda, see the disappearance of the discount as a sign of how far the crypto industry has matured. He cites the U.S. Securities and Exchange Commission (SEC)’s recent approval of spot bitcoin ETFs as proof of the extent to which cryptocurrencies like Bitcoin (BTC) are being adopted.
“I see the narrowing of the discount as a sign of the industry maturing and the improved enterprise acceptance of BTC. The BTC ETF approval decision, as welcome as it was, seems to be just one more slow turn of the adoption wheel,” Hawkins said.
The Return of the GBTC Premium
Another expert, Denis Petrovcic, co-founder and CEO of Blocksquare, said he does not rule out the market reacting to the disappearance of the discount by “pushing it to a premium we have not seen since 2020.” However, Petrovcic also concurred that crypto assets like BTC remain volatile, and not even the ETF hype can change this.
If indeed the GBTC’s premium is to return, Petrovcic said he foresees this ultimately gravitating to back NAV “to compensate for the ETF’s convenience and accessibility.”
Meanwhile, Zak Taher, the CEO of Multibank.io, indicated that he agrees with many of his peers’ views on what the disappearance of the discount likely means. However, Taher also told Bitcoin.com News that while a premium is a possibility, the “continued parity or even a resurgence of the discount are also potential scenarios.”
Andrey Stoychev, head of Prime Brokerage at Nexo explained that from an economic standpoint, one might suggest that the market has achieved a balance between the supply of and demand for GBTC shares. Hypothetically speaking, Stoychev said if inflows and outflows are equal, the present bitcoin price offers the most significant chance for profit realization in the past two years.
“With spot bitcoin ETFs approved, Grayscale investors have now been simply freed to realize gains,” Stoychev told Bitcoin.com News. “Fortunately, that selling pressure has been absorbed by newer market participants and investors, as evident from the disappearance of the GBTC discount. Predicting a meaningful premium is tricky; it depends on Bitcoin demand and industry-wide events, like the upcoming block rewards halving, that could shift supply dynamics and impact the GBTC discount.”
Stoychev added:
Arguably, right now, investors are spoiled for choice on how to gain exposure to Bitcoin. That field, dominated by the world’s leading asset managers, will possibly be characterized by miniscule margins and fierce price competition. Should this be the case, serious deviations toward a premium or discount for GBTC shares are unlikely without a significant, industry-wide event to disturb the markets and force investors into fear or greed.
Before dropping to zero in late February 2021, the digital asset investment product’s premium to NAV ratio had largely stayed above 10%. After the premium turned negative, the price of the GBTC stock also began to drop.
As shown by the data, the price of GBTC fell from one of its 2021 highs of just over to less than in December 2022. However, since then, the price has rallied. At the time of writing, one GBTC share was trading at just above . As of Jan. 30, 2023, GBTC’s BTC reserves are now under 500,000 at 496,573.81 BTC.
What are your thoughts on this story? Let us know what you think in the comments section below.
South Korea’s Crypto Surge — Navigating the ‘Kimchi Premium’ and Massive Trade Volumes
Recent data reveals that South Korea’s crypto trading volume has surged in recent months, with two exchanges, Upbit and Bithumb, contributing over 10% to the global trading volume as of Jan. 4, 2024. Additionally, while the global price for bitcoin hovers around ,356 per unit, in South Korea, it commands a premium, trading at approximately ,317 per coin.
Tracing the Strong Won-to-Crypto Volumes and Premiums in South Korea
As of 8:00 a.m. Eastern Time on Jan. 4, 2024, the global crypto economy has seen a trade volume of approximately .98 billion, with bitcoin (BTC) maintaining a position above the K mark. A significant portion of this trading activity is rooted in South Korea; at this moment, Upbit has conducted billion and Bithumb .7 billion in 24-hour trades.
Together, these two exchanges represent 10.1% of the global crypto trade volume on Thursday. Likewise, South Korean exchanges Coinone and Korbit are experiencing increased crypto trade volumes.
Currently, South Korean platforms are trading bitcoin (BTC) at a premium; at the time of this writing, Upbit’s BTC is valued at 0 above the global average. With BTC priced globally at ,356 per unit, it is trading at ,317 per coin on Upbit, and similar premium rates are observed on Bithumb, Coinone, and Korbit.
Additionally, premiums are noted on SOL, ETH, and various other leading crypto assets. South Korea is historically known for its cryptocurrency premiums, commonly termed the “Kimchi Premium.”
This premium isn’t merely coincidental; it stems from a myriad of factors, primarily the high demand for BTC and other crypto assets within South Korea relative to its supply and international liquidity. Additional factors include rigorous capital controls, the regulatory landscape, and a somewhat insular market resulting from unique foreign exchange regulations.
While the South Korean government has expressed disapproval towards these elevated prices over the years, the premium trend persists. On Jan. 4, 2024, the Korean won accounts for 3.51% of the total bitcoin (BTC) trading volume and 8.06% of global SOL transactions.
The Korean won is particularly significant in the trading of crypto assets such as SEI, POWR, and BLUR, with 34.93% of SEI trades, 72.87% of POWR swaps, and 55.56% of BLUR transactions being conducted in won.
Other cryptocurrencies that are popular among South Korean traders include LSK and ETH. Normally, crypto traders would try to exploit the price difference between two markets for profit, and sometimes people are quite successful.
However, the strict capital controls and regulatory frameworks in South Korea can make such arbitrage opportunities challenging and less efficient, thereby sustaining the premium in the localized region. While the future of these premiums and the broader crypto market remains uncertain, the current trends reflect a robust engagement with digital assets in South Korea.
What do you think about the significant trade volume settled in won and the premiums on specific crypto assets on Upbit, Bithumb, Coinone, and Korbit? Share your thoughts and opinions about this subject in the comments section below.
Avalanche Pays Premium to Incentivize Validators, Will AVAX Soar To $145?
Avalanche, the fourth-generation proof-of-stake (PoS) blockchain, incurs significant costs to incentivize its validators. Token Terminal data on December 7 shows that in the past year, the smart contract platform paid over 5 million in AVAX to compensate its validators despite generating only .5 million in user fees.
Avalanche Is Paying A Premium To Incentivize Validators
Although it appears that Avalanche is paying a premium for validators, this is critical in securing the network and ensuring all transactions are confirmed. Overall, and being a proof-of-stake network reliant on node operators for security and decentralization, Avalanche’s decision to pay validators a premium is, as its users demand, to maintain a robust network of nodes.
According to CoinMarketCap data, the network has a market cap of over .8 billion. It is currently in the top 10 by liquidity, surpassing Polygon and Polkadot, competing low-fee alternatives. As it is, by incentivizing validators with generous rewards, Avalanche ensures that there is a strong pool of nodes available to maintain the network’s operation.
Through these validators, AVAX holders can stake and receive rewards. As of December 7, there are over 1,539 validators currently staking over 248 million AVAX and earning 7.84% APY. At the same time, statistics show that Avalanche has a staking ratio of 57.11%. Most AVAX in circulation are used to secure the network at this level.
While AVAX incentivization might draw more validators, Avalanche documentation also states that the network doesn’t require complex hardware to operate a node. At the same time, the blockchain, unlike Ethereum, states that staked AVAX is not at risk of being slashed–or penalized by the network–provided all network requirements are met. This feature could explain the steady rise in validator count over the past three years.
AVAX Is Up By 200%, Trading At 2023 High
While Avalanche grows its validator count, AVAX prices have also been expanding steadily, mirroring the general market. Thus far, AVAX is changing hands above , up over 200% in the last three months. At spot rates, AVAX is trading at new 2023 highs and in a bullish breakout formation, looking at price action in the daily chart.
Related Reading: Apollo Crypto Predicts Bitcoin Price Of 0,000 This Cycle, Here’s Why
Looking at how AVAX is, bulls might break above . If the accompanying surge is with expanding trading volume, it might be the base for another leg up that might lift the coin toward or higher in the sessions ahead. When AVAX peaked in 2021, it rose to as high as 5.
Bitcoin Premium Soars in South Korea, Trading $1,500 Above Global Norm
Based on recent data, the surge of bitcoin beyond the ,000 mark has triggered a significant increase in trading activity originating from South Korea. Alongside this heightened volume, bitcoin is currently commanding a ,500 premium on major South Korean cryptocurrency exchanges, including Upbit, Bithumb, Korbit, and Coinone.
South Korea’s ‘Kimchi Premium’ Returns Amid 2023’s End-of-Year Bitcoin Rally
As bitcoin’s value soared to a peak of ,400 per unit on December 4, 2023, the digital currency has been exchanging hands at around ,769 per coin. Archived data recorded on December 5 reveals a substantial .8 billion in global 24-hour trading volume, with bitcoin (BTC) accounting for billion of these trades. During the 24-hour period, the most prominent fiat currencies traded against bitcoin were the USD, KRW, EUR, GBP, and JPY.
The United States dollar (USD) dominated with 14.87% of the total trades, while the Korean won (KRW) comprised 4.71%. On December 3, as reported by Bitcoin.com News, BTC’s ascent past the K mark coincided with a notable ‘Kimchi premium’ in South Korea. This premium persisted as of 00:35 (UTC) on December 5, 2023. On Upbit, a leading centralized cryptocurrency exchange in South Korea, a striking .82 billion in trades has been tallied in the last 24 hours.
Currently, bitcoin is fetching a price of ,272 on Upbit, which is notably ,503 higher than the global average of ,769 per unit. While South Korea is renowned for its cryptocurrency premiums, other regions including Hong Kong, Japan, Malaysia, the Philippines, and Thailand occasionally experience similar premium trends. Ethereum (ETH), with a global average price of ,234, is trading on Upbit at an elevated rate of ,310 per coin.
Similarly, solana (SOL) is listed on Upbit at .27 per unit, surpassing its global average of .28. This trend of premiums is also evident on Bithumb, which has reported 7 million in spot market trade volume. Bitcoin, along with other digital currencies like ethereum and solana, are all trading at a premium on this platform. Coinone and Korbit are witnessing similar price surges for these same cryptocurrencies. Another notable instance is bitcoin cash (BCH), which has a global average of 1 but is trading at 9 per coin in South Korea.
What are your thoughts on the crypto premiums in South Korea? Let us know what you think in the comments section below.
Solana Soars 19% Amid Market Consolidation, Commands Notable ‘Kimchi Premium’ in South Korea
Bitcoin and ethereum have remained stable on Wednesday, showing little change in their values recently. In contrast, solana (SOL) experienced a notable surge, climbing over 19% against the U.S. dollar, moving from a low of .92 to a peak of .32. Despite a minor decrease following its rise into the range, solana’s value still holds a 9% increase. As of November 15, solana boasts the sixth-highest trading volume among all cryptocurrencies.
Solana Rises Sharply Gathering Steam from South Korean Volumes
This week has witnessed a significant surge in the value of SOL, the native digital currency of Solana, a layer one (L1) blockchain network. In the span of the last seven days, SOL’s value has escalated by over 45% when measured against the U.S. dollar.
Over the past month, this increase has been even more pronounced, with SOL showing a 167% rise. On Wednesday, November 15, 2023, SOL demonstrated a dynamic trading range, fluctuating between .92 and .32 per unit.
This marks a notable 19% increase from the opening price at the beginning of the day’s trading activities. Despite SOL’s impressive growth, it remains over 75% below its November 2021 peak, which saw values reaching 9 per coin.
During the last 24 hours, SOL notched a significant .31 billion in 24-hour global trade volume, ranking it as the sixth largest for the day. In the realm of market capitalization among over 10,000 cryptocurrency assets, SOL also holds the sixth position.
On Wednesday, the dominant trading pair for solana is USDT, comprising 59% of all SOL trades. Tether is trailed by USD (16.64%), KRW (12.3%), BTC (4.26%), and BUSD (2.18%) as SOL’s top trading pairs on November 15.
Presently, a modest ‘Kimchi premium’ is observed for SOL in South Korea, with prices at .34 per unit on Bithumb and .61 on Upbit, while the global average stands at .80 per SOL as of 12:26 p.m. (EST). At the same time, on Wednesday afternoon, SOL is the top trading pair on Upbit, accounting for 7.65% of the exchange’s total trading volume.
What do you think about solana’s rise this week and the 19% jump on Wednesday? Share your thoughts and opinions about this subject in the comments section below.
Bitcoin Skyrockets, Yet South Korea Experiences a ‘Kimchi Discount’ Instead of the Usual Premium
Bitcoin has soared, doubling its value since the start of the year. Yet, intriguingly, the famed “Kimchi premium” in South Korea remains absent in this current surge of bullish activity. This is a notable deviation from previous bull markets, where the phenomenon was prominently observed. In fact, this time around, BTC prices in South Korea are trading at a discount compared to other parts of the world.
Despite the Won Ranking as the 5th Largest Bitcoin Trading Pair, South Korea Sees Unprecedented ‘Kimchi Discount’
This month, bitcoin has exhibited remarkable performance, appreciating 27.9% against the U.S. dollar. As of 10:15 a.m. EDT, BTC hovered just above the K mark, boasting a seven-day gain of 14.8%.
Intriguingly, during this upward trajectory, bitcoin prices on South Korea’s top crypto exchanges, Upbit and Bithumb, are slightly lower. This scenario stands in stark contrast to the “Kimchi premium” observed in previous years, which typically manifested during crypto bull runs, pushing BTC’s value several hundred dollars above the global average.
Currently, bitcoin trading is thriving in South Korea, with cryptocompare.com data revealing that BTC is the fifth largest trading pair in the country, accounting for 3.73% of all BTC’s global trades.
Despite BTC’s global trading price of ,059 at the time of writing, it is exchanging hands at ,902 on Upbit and approximately ,869 on Bithumb. This translates to a 7 and roughly 0 per unit discount on Upbit and Bithumb, respectively.
Contrary to the “Kimchi premium,” where not just BTC, but also other cryptocurrencies like XRP and ETH would experience price elevations, the current discounts are uniquely impacting bitcoin’s value.
Ethereum, for example, is exhibiting a minor discount discrepancy of around -15 per unit. On the trading front, Bithumb recorded approximately 8 million in global trades on Friday, while Upbit saw a much higher .7 billion. Among Bithumb, Coinone, and Korbit, Upbit dominates in the country, commanding nearly 80% of South Korea’s crypto trading volume.
South Korea’s government and regulators from the country have tried to curb the “Kimchi premium” and put the trend to an end. While there is no sign of a premium, a “Kimchi discount” still brings an opportunity for arbitrage.
What do you think about the lack of the “Kimchi premium” during bitcoin’s current upswing? Share your thoughts and opinions about this subject in the comments section below.