It is noteworthy that the domestic cryptocurrency market price is 20-30% higher than the international market price, so that the phenomenon called “kimchi premium” disappears and the domestic market price is lowering by 5% compared to the international market price.
According to the domestic cryptocurrency exchange Upbit on the 5th, bitcoin was traded for 39.98 million won as of 3 pm on the day. Bitcoin was trading at $37,678 at the same time as the international market price, which is an undervalued price of more than 5% when applying the exchange rate on the day. Accordingly, Upbit is guiding a’caution’ indication that the price of virtual currency such as Bitcoin and Ethereum differs by more than 5% from the global market price. Upbit guides’significance’ when the upbit market price is 3% or more higher or lower than the coin market cap price, which is a global virtual asset market analysis site, and’caution’ when it is higher or lower than 5%.
The industry is suggesting various reasons for the disappearance of the kimchi premium in the Korean market and the appearance of the’Korea Discount’ phenomenon. One of the main reasons is that the volume of cryptocurrency transactions is far below that of overseas.
As of 3 p.m., the trading volume of 24-hour bitcoin on Binance, a global exchange, was $3.21561 million, while the 24-hour bitcoin trading volume of Bithumb, a domestic exchange, was $24.28 million. According to Coinhills, a cryptocurrency information company, in 2017 alone, Korea accounted for more than 20% of the global bitcoin transaction volume, but now it is only 5%.
The reason is that the interest of domestic individual investors has decreased significantly from 2018. Korea’s floating capital has recently been rushing to the domestic stock market, but individual investors are not prematurely entering the virtual currency market due to negative perceptions and strict regulations. Overseas, institutional investors are actively buying virtual currency and jumping into it.
The industry predicts that if this trend continues, the’Korea Discount’ phenomenon will continue for some time.
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