"Kimchi Premium" Reappears In Bitcoin! What Does" Kimchi " Mean?

"Kimchi premium" is back. Bitcoin (BTC) is trading over 6 percent on major South Korean crypto exchanges as of March 29.

CryptoQuant data shows that the premium in the South Korean market hasn't existed for months; it even fell to about-6% in early February, when BTC fell below $ 30,000. The kimchi premium occurs when the price of Bitcoin is traded higher on South Korean exchanges than in other markets.

The return of this premium, according to comments by renowned analyst Joseph Young, is a bullish sign that Bitcoin demand in South Korea is probably outpacing supply.

Bitcoin premium on South Korean exchanges. Source: CryptoQuant

Why is the kimchi premium important to Bitcoin?

Although South Korea does not account for the majority of the global Bitcoin market, it remains one of the largest foreign exchange markets by daily volume. For example, in CoinMarketCap, Bithumb is the seventh largest exchange in the world by daily trading volume. In the past 24 hours, $ 1.3 billion of BTC has been traded.

The premium was especially high during past bull cycles in 2017, when BTC traded more than 20% higher on South Korean exchanges than Coinbase and other major exchanges, according to the analyst.

Young believes the kimchi premium shows two main trends. The first is that overall market sentiment in South Korea remains healthy. The second is proof that more buyers are entering the market.

In the weeks before Visa announced that it would conduct transactions using USD coins (USDC) on its Ethereum blockchain, the premium was already on the rise. 

When the news was announced, both Bitcoin and Ether (ETH) increased by as much as 5%, leading to a strong recovery in the cryptocurrency market. 

The announcement could add further momentum to the pace of corporate adoption so far this year and the prospect of a broad BTC rally.

At this time, Ki Young Ju, Cryptoquant's CEO, said, “the smells of collective adoption come to my nose.”

Traders consider next BTC moves

According to an anonymous trader known as Rekt Capital, if Bitcoin goes above $ 59,000, it's likely to see a new all-time high.

"BTC IS REBOUNDING THIS WEEK AFTER THE PREVIOUS 2 WEEKS OF DOWNWARD CANDLES SHOWED SIGNS OF SLOWING MOMENTUM ON THE SALES SIDE. BTC WILL TRY TO CRACK $ 59,000. IF IT BREAKS, IT WILL HIT ALL-TIME HIGHS.”

Meanwhile, another trader named CryptoCapo said the momentum could potentially push Bitcoin to new heights and even as high as $ 80,000:

"PANIC DID NOT MAKE SENSE. SOME PEOPLE JUST WANT TO SEE THE WORLD BURN... THE BTC WILL RISE TO OVER 80 THOUSAND.”