Bitcoin Price Looks Bullish as Kimchi Premium Surges to 11%
Data from CryptoQuant shows that the so-called ‘Kimchi Premium’, the higher-than-average global Bitcoin price charged on Korean crypto exchanges, has hit a yearly high of 11 percent. According to a new report by market analyst Joseph Young on CoinTelegraph, this surge could indicate that Bitcoin is in the “2017-esque retail stage” of its current price cycle.
Young explained that back in 2017, the Kimchi premium put the price of Bitcoin in Korea at more than 20% over the average Bitcoin price in the rest of the world. Indeed, BTC was trading at roughly $24,000 in South Korea, while most of the rest of the world were paying $20,000 per BTC.
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The Kimchi premium is really back. $BTC
— Joseph Young (@iamjosephyoung) April 4, 2021
“Demand for Bitcoin in South Korea Is Likely Outpacing Supply.”
Since Bitcoin’s major boom-and-bust cycle in late 2017 and early 2018, the Kimchi Premium has been regarded as a signal that Bitcoin prices may be in for further gains. Young explains that this is because the Premium is “a bullish sign suggesting that demand for Bitcoin in South Korea is likely outpacing supply.”
In other words, a high premium can indicate that market sentiment in South Korea is positive; it can also indicate that more buyers are making their way into Bitcoin markets. “The premium was especially high during past bull cycles, particularly in 2017 when BTC was trading well over 20% higher on South Korean exchanges compared with Coinbase and other large exchanges,” Young said.
Market sentiment in Korea is not bad. $BTC sellers are not Koreans obviously. https://t.co/4UIneKZKuu
— Ki Young Ju 주기영 (@ki_young_ju) March 25, 2021
Why could Bitcoin prices in South Korea be an important indicator for what may soon happen with Bitcoin in the rest of the world? Joseph Young says that South Korea’s BTC market is one of the world’s largest in terms of daily volume.
For example, the South Korean exchange Bithumb is listed as the 7th-largest exchange in the world by trading volume.
BTC’s Corporate and Institutional Boosts Continue
While the Kimchi Premium is likely a positive indicator for the price of Bitcoin in parts of Asia, there are other indicators that suggest that BTC may continue to perform well in the coming weeks.
Last week, PayPal and Visa made separate announcements about their growing enmeshment with various parts of the cryptocurrency world. Visa will be settling some of its transactions using USDC on the Ethereum network; PayPal will allow its users to pay merchants with Bitcoin and several other cryptocurrencies.
Both announcements were the latest in a string of positive corporate and institutional news for Bitcoin since the start of 2021.
Where is Bitcoin headed next? As prices continue to dance just under $60K, the jury is still out. However, even if a pullback is possible in the short-term, Justin Hartzman, CEO and Co-Founder of CoinSmart, pointed out to Finance Magnates last week that: “analysts [have been] calling for much higher prices this year.”
“I think as we see more institutions enter the market and inflation as a result of printing money across the world, the more the mass market will enter the crypto space. From there, it is simply a matter of supply and demand,” he said.
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