South Korea's bitcoin premium index has reached a 10-month high despite a significant global market downturn.
Rise of the Kimchi Premium Index
On Monday morning in Asia, the Korea Premium Index rose to 9.7%, marking its highest since April 14, 2024. According to CryptoQuant data, the premium is down to 8.2% at press time.
Price Gap Causes
The 'kimchi premium' refers to a price gap between South Korean and other exchanges. It may indicate a stronger buying pressure among Korean retail investors. While Bitcoin’s price is tanking below $92k and Ethereum is down 20%, the Korea Premium Index is up as the South Korean market is difficult for foreign investors to enter.
Expert Analysis and Forecasts
According to a report by The Block, an analyst at Presto Research, Min Jung, said, 'The Kimchi Premium typically rises in bull markets when Korean investors bid higher, but it can also spike during periods of panic selling.' Jung predicted the kimchi premium would remain elevated so long as American investors maintained their selling activities. He added, 'However, historically, the Kimchi Premium has averaged around 5%. If the market stabilizes and rebounds, we would likely see the premium narrow back toward that level.'
South Korea's kimchi premium index shows sustained growth amid global market instability, which may be related to unique local market dynamics.
