While the price of Bitcoin (BTC) continues to be in the range of 56-60 thousand dollars, the “Kimchi premium” is also rising.
The kimchi premium occurs when Bitcoin trades at a higher price on South Korean exchanges compared to other major markets.
This premium exceeded 20 percent in 2017, and while BTC was traded in the US at around $ 20,000, it increased to around $ 24,000 in South Korea.
This premium, which resurfaced at 6 percent on 29 March, has since risen to 11 percent.
Is 11 percent Kimchi bonus a good thing for Bitcoin?
When the Kimchi premium broke the last record, Bitcoin price peaked, followed by a sharp correction.
Although the emergence of this premium signals that South Korea’s cryptocurrency market is too high, it is not enough to say that the BTC price will peak.
CryptoQuant CEO Ki Young Ju said that while the premium is alarming, Bitcoin fundamentals remain strong.
The biggest difference between the current situation and 2017 is that South Korea now accounts for only 1.7 percent of the volume of the global Bitcoin market.
For this reason, a decrease in the South Korean market will be thinks it won’t make a big impact.
Moreover, unlike 2017, organizations and high-income figures are running the current rally.
High-income investors keep buying
He pointed out that on March 29, a large amount of Bitcoin was released on Coinbase Pro.
BTC coming out of exchanges often means institutional investors buy Bitcoin and move it to cold storage.
Ki, he stated:
“Taking short positions for Bitcoin does not seem like a very good idea. It is unlikely to go below this level, as organizations buy at $ 52,000.”