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The term “Kimchi premium” describes the price differences between cryptocurrency exchanges in South Korea and those in the global markets. These Kimchi premiums remain high, making South Korea a significant player in the crypto marketplace. However, government officials there have looked for ways to discourage foreign investors from exploiting the premiums, in order to protect the integrity of their markets.
Kimchi premium is the price gap that occurs in South Korean crypto exchanges compared to foreign crypto exchanges. This difference is caused by a lack of high-return investment options for South Korean investors.
Kimchi premiums occurring on South Korean cryptocurrency exchanges can make certain coins' valuations higher than those on other crypto exchanges. For many, the Kimchi premium creates an advantage for traders located in South Korea. However, there are many points to consider. For example, to make a profit, traders there must purchase a token such as Bitcoin on a foreign exchange. After that, the investor can sell the coins for a higher price on a South Korean exchange like Bithumb or Upbit.