As capital flow controls continue to enforce the “kimchi premium, Bitcoin (BTC) was trading at $5,000 higher in South Korea than in other markets on Wednesday. Also, the price on the Korea-based Bithumb exchange stood at $45,115, while Bitcoin was trading at $39,932 on Coinbase at the time of publication.
Also, the kimchi premium is a result of capital flow controls aimed at stopping the cross-border transfer of “hot money, according to the recent Bank of America statement and the Reuters report.
According to the Bank of America, Korean capital controls allow the ‘Kimchi premium’ to persist and suggesting this to be a result of effective capital control that prevents effective arbitrage of onshore and offshore prices, the onshore price for cryptocurrencies in Korea is persistently above international prices
Despite the coin’s recent 32% losses and signs of increased transfers to centralized exchanges, there is 12.5% premium on Bitcoin in Korea. Also, daily cryptocurrency trade volume reached new heights in Korea in the first quarter of 2021, exceeding 1,480 trillion won ($1.3 trillion), as stated by the Bank of America.
While demand for crypto continues in South Korea, so too does demand for gold. Gold prices rose four days in a row leading up to Tuesday, hitting heights not witnessed since January.