The Korea Premium, also known as the “Kimchi Premium,” describes a phenomenon where cryptocurrency prices on South Korean exchanges trade higher than on international exchanges. This price disparity is primarily driven by strong domestic demand, limited arbitrage opportunities due to capital controls, and a generally robust retail investor base. It indicates a localized market inefficiency or heightened investor sentiment within South Korea.
Context
The existence and fluctuations of the Korea Premium are frequently reported in crypto news as an indicator of regional market sentiment. Arbitrageurs sometimes attempt to profit from this price difference, although capital restrictions complicate such efforts. Analysts observe the premium to gauge the intensity of South Korean investor activity and its potential influence on global asset prices.
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