South Korea’s bitcoin (BTC) boom appears to have returned in earnest, with more reports of investors aged 20-39 plunging into the market, and claims that the “kimchi premium” may have returned for the first time in earnest since early 2018.
The kimchi premium was a phenomenon whereby BTC and some major altcoins were trading on domestic exchanges at significantly higher prices than on international trading platforms due, apparently, to heightened demand.
The premium came to an abrupt end in early 2018, at the start of the bear market – and was eventually replaced by a “kimchi bonus,” a reversal whereby South Koreans were actually (briefly) paying less than their international counterparts for BTC on domestic platforms.
Since then, a number of analysts have variously claimed in recent months the kimchi premium has returned, arguably with questionable degrees of accuracy.
But Ju Ki-young, the CEO of the crypto analytics provider CryptoQuant, opined recently that the “Korean bubble” was “worrisome” as, per data from his own platform, the kimchi premium indicator registered a one-year “high.”
“While it is impossible to say whether the kimchi premium has peaked or if it will continue growing onwards, it makes me worried.”
And when the Three Arrows Capital CEO Zhu Su remarked that should “Koreans buy [Grayscale Bitcoin Trust] shares instead of BTC on [the domestic trading platform] Bithumb, they can save 25%+,” @androolloyd responded succinctly: “Then they wouldn’t own BTC.”
(The trust is structured to hold BTC, while the value of each share is dependent on the amount of crypto under management. However, there is no way to redeem the underlying crypto.)
Meanwhile, the terrestrial TV broadcaster MBC reported on the rise of bitcoin and altcoin buying among citizens aged in their twenties and thirties.
In addition to a rise in investment among the nation’s “crypto moms,” reports have suggested that BTC investment is “no longer seen as optional” among younger age groups.
MBC aired a number of interviews with university students who stated that they had made investments of as little as USD 90 in bitcoin last year and were now reaping the benefits.
The interviewees said they were concerned that low-paying jobs and a sluggish stock market presented them with very little in the way of true money-making opportunities. The students added that there were “no markets” as lucrative as crypto, although the media outlet warned that the demographic group was “rushing” into “risky investments.”
At the time of writing (11:34 UTC), BTC trades at USD 57,634 and is unchanged in a day. It’s up by 17% in a month and 740% in a year, while multiple altcoins have performed even better.
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