Bitcoin’s ‘Kimchi Premium’ Returns to 1%, Longest Positive Stretch Since May

The so-called kimchi premium, in which Bitcoin trades at a higher price in South Korea than overseas, has reappeared. The move is being read as a sign that buying appetite among Korean retail investors is partly recovering alongside Bitcoin’s recent rebound.

Bloomberg reported that Bitcoin on Upbit was trading on Sept. 1 at about a 1% premium to Binance’s dollar-denominated price. Domestic Bitcoin prices have remained above overseas levels for the past week, the longest positive stretch since early May.

Rachael Lucas, an analyst at BTC Markets, said Korean retail investors tend to buy aggressively during risk-on periods. She added that there have been cases in the past where Bitcoin returns strengthened after the kimchi premium turned from negative to positive.

Bitcoin briefly climbed above $80,000 last month, helped by expanded buybacks of long-term Treasuries by the US Treasury and improving sentiment toward digital assets. It is now trading near $79,000. Inflows into US spot Bitcoin exchange-traded funds have also increased again since mid-August.

Still, some analysts say the recovery in the kimchi premium is not enough to be taken as a full-fledged bullish signal. Markus Thielen, head of research at 10x Research, said the premium turned positive, but spot trading volume did not increase alongside it. He said that makes South Korea unlikely to be a major driver of Bitcoin’s rebound in its early stages.

Lucas also said the latest move looks less like a new bout of FOMO, or fear of missing out during a rally, than a small sign that selling pressure in South Korea has eased. US institutions and ETF fund flows are still driving price moves, she added.