December in the cryptosphere witnessed an exciting spectacle: South Korea's bitcoin premium index, a thermometer of purchasing power in the kimchi nation, soared to levels reminiscent of the November 2021 peak. This sudden wave of Heat has analysts sweating, not knowing if it is the precursor to a bullish stampede or the prelude to a spicy correction.
bitcoin's 'Kimchi Premium': Korean FOMO Excitement
Market sentinel CryptoQuant points out an intriguing trend: “Korean premium overheating.” This phenomenon, they whisper, could be the harbinger of price highs, fueled by a potent cocktail of Korean cash heading toward digital shores and a dash of FOMO-induced enthusiasm.
The Korean cousin is overheating.
“The Korea Premium Index is often used to identify price peaks because Koreans 1) have immediate access to cash to purchase coins on exchanges and 2) have a high level of FOMO.”
by @Signal_Quant– CryptoQuant.com (@cryptoquant_com) December 26, 2023
As of now, bitcoin boils a little beyond the $42,000 level and recovers from a 1.33% scar in the last 24 hours. But in Korea the story is different. The Premium Index is burning with positivity and reveals the willingness of retail investors to pay a premium for their bitcoin fix. This upward trend suggests a hunger for higher prices fueled by kimchi.
btc price action in the last 24-hours. Source: bitcoin" target="_blank" rel="noopener nofollow">Coingecko
This “Kimchi Premium”, the price difference between Korean and global exchanges, is no stranger to the crypto scene. Think of it as bitcoin wearing a fiery robe of gochujang, offered at a premium price by Korean merchants eager to savor the digital delicacy.
Korean exchange king Upbit saw bitcoin as its third most traded asset in the past day, with the btc/KRW pair accounting for a mouth-watering 7% of total volume. Bithumb, another kimchi aficionado, witnessed an even spicier slice, with the pair reaching 48% of the total trade.
bitcoin slightly below the $43K level today. Chart: TradingView.com
Korea's cryptocurrency craze: technology, openness and caution
Why the Korean fervor? Legal ownership of bitcoin, a tech-savvy population with a penchant for digital thrills, and perhaps a dash of the national gaming spirit appear to be the secret ingredients. This open-mindedness has transformed Korea into fertile ground for cryptocurrency adoption, with bitcoin reigning on the digital menu.
But amid the kimchi-scented euphoria, caution is advised. The Premium Index, like the fickle plot of a K-drama, can change direction in the blink of an eye. A sudden drop in Korean purchasing power or a global market correction could cause the premium to plummet, leaving investors with heartburn instead of profits.
Cryptocurrency trading has found a home in South Korea. The country's government has decriminalized the ownership and trading of bitcoin on regulated exchanges. One possible explanation for the country's early acceptance of digital currencies and its general openness to new ideas is its fascination with technology and gaming.
The Korean bitcoin scene is truly a spectacle that offers a glimpse into the future of global cryptocurrency adoption. It remains to be seen whether this is the prelude to a bullish stampede or a spicy correction. But one thing is for sure: the Korean market is adding a distinctive flavor to the global crypto scene, and it is worth savoring, with a cautious eye on the price.
Featured image from Shutterstock
