The bullish case for Bitcoin continues to develop as the infamous Kimchi Premium is starting to form on BTC markets.
The Kimchi premium is a phenomenon widely known among traders, where quoted prices in Korean Won (KRW) are higher than the equivalent in other international currencies like the US dollar.
As a country, South Korea has been known for its demographic that is willing to experiment and be an early adopter of new trends. The demand for cryptocurrencies in Korea has been stronger than in other parts of the world. As a result, the Kimchi premium for digital currencies has appeared in the past — often being a leading indicator.
Bitcoin (BTC) shot up during last week while breaking the $5000 level and is looking to continue its upward movement — currently trading in the $5200-$5300 range.
Does the Kimchi Premium Confirm the Bullish Sentiment?
With the sudden price increase, volatility has also made an appearance — creating arbitrage opportunities across Bitcoin markets. At the same time, traders have spotted the formation of a price discrepancy between the BTC/USD and BTC/KRW pairings, also known as ‘the Kimchi Premium.’
As previously reported by BeInCrypto, Chinese traders have been paying a premium on OTC trades for the Tether (USDT) stablecoin. South Korea’s Kimchi Premium, which is a markup on Bitcoin price asks directly, is now following suit — leading some to confirm the bullish case for the first and foremost cryptocurrency.
If History is Any Indication…
The price discrepancy has appeared in the past for Bitcoin, especially during the last bull run. Data shows that the Kimchi premium has, at times, reached the 40 percent mark.
Right now, according to data from South Korean exchanges Korbit and UpBit, the premium is around 1.5 percent. Whether it continues to increase in the near future remains to be seen. However, the re-appearance of the Kimchi phenomenon is already hinting at the growing demand for cryptocurrencies in the country.
What do think of the re-appearance of the Kimchi Premium? Is this a leading indicator for upwards price swings? Share your opinion in the comments!
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