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bitcoin

Political Instability In South Korea Fuels Bitcoin ‘Kimchi Premium’ Surge

Ash Tiwari
by Ash Tiwari
8 months ago
·
Posted in Bitcoin News
Trusted Editorial content, reviewed by leading industry experts and seasoned editors. Ad Disclosure

The Bitcoin (BTC) ‘kimchi premium’ has returned to South Korea’s cryptocurrency market as the country grapples with political instability. This has led to a weakened Korean won (KRW) and a higher price for the leading cryptocurrency.

Bitcoin Kimchi Premium Surges In South Korea

According to CryptoQuant CEO Ki Young Ju, the KRW-USD trading pair has reached a 15-year low, reflecting dwindling confidence among South Koreans in their fiat currency. The depreciating won has driven South Koreans to invest in emerging assets like Bitcoin to safeguard the purchasing power of their KRW during times of economic uncertainty.

Related Reading: Cryptocurrency Tax Postponed! South Korea Extends Breathing Room To 2027

In a post on X, Ju explained that South Korean crypto traders are increasingly converting KRW into cryptocurrencies such as Bitcoin and USD-pegged stablecoin USDT on the Upbit exchange, where BTC is trading at a premium of 3-5%. This price difference, commonly referred to as the Bitcoin ‘kimchi premium,’ occurs when BTC trades at a higher price on South Korean exchanges compared to global platforms.

kimchi premium
Source: Ki Young Ju on X

Typically, the so-called kimchi premium arises due to high local demand, increasing regulatory barriers, and limited arbitrage opportunities in South Korea’s cryptocurrency market. However, in this instance the premium is primarily driven by the weakening KRW due to rising political turmoil in the country.

At the time of writing, Bitcoin is trading in South Korea for 145,000,000 KRW or approximately $98,600, while on a global exchange like Binance, BTC is trading at $95,315. The difference between these platforms highlights the impact of the kimchi premium.

What’s Causing The KRW Decline?

The South Korean won’s decline can be attributed to ongoing political unrest, which has intensified since December 3. On this date, the now-impeached, former president Yoon Suk Yeol declared martial law for six hours before reversing the decision. Following this, South Korea’s parliament impeached Han Duck-soo, the country’s prime minister and acting president.

Related Reading: Crypto Controversy: Jail Awaits Former South Korean Politician – Details

These dramatic developments have sent shockwaves through global markets, undermining confidence in South Korea’s democratic institutions and raising fears of the country facing its worst political crisis in decades. The monthly chart below illustrates how the KRW has plunged to its lowest value against the USD since March 2009.

KRWUSD
Source: KRWUSD on TradingView.com

In a separate post on X, Jeff Park, head of alpha strategies at investment manager Bitwise, highlighted that South Korea’s political turmoil centers on allegations of election fraud and a loss of trust in the country’s National Election Commission (NEC). Park commented:

The use of impeachment as a political tool, combined with allegations of foreign election interference, underscores the fragility of democracy in the face of disinformation. This is not just a Korean story; it’s a warning for democracies worldwide.

The political unrest in South Korea has sent its cryptocurrency market into a frenzy, leading to record-breaking trading volumes. At press time, BTC trades at $95,315, down 0.2% in the past 24 hours.

bitcoin
BTC trades at $95,315 on the daily chart | Source: BTCUSDT on TradingView.com
Featured Image from Unsplash.com, Charts from X and TradingView.com
Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.
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Ash Tiwari

Ash Tiwari

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Ash is a seasoned freelance editor and writer with extensive experience in the blockchain and cryptocurrency industry. Over the course of his career, he has contributed to major publications, playing a key role in shaping informative, timely content related to decentralized finance (DeFi), cryptocurrency trends, and blockchain innovation. His ability to break down complex topics has allowed both seasoned professionals and newcomers to the industry to benefit from his work. Beyond these specific roles, Ash's writing expertise spans a wide array of content, including news updates, long-form analysis, and thought leadership pieces. He has helped multiple platforms maintain high editorial standards, ensuring that articles not only inform but also engage readers through clarity and in-depth research. His work reflects a deep understanding of the rapidly evolving blockchain ecosystem, making him a valuable contributor in a field where staying current is essential. In addition to his writing work, Ash has developed a strong skill set in managing content teams. He has led diverse groups of writers and researchers, overseeing the editorial process from topic selection, approval, editing, to final publication. His leadership ensured that content production was timely, accurate, and aligned with the strategic goals of the platforms he worked with. This has not only strengthened his expertise in content strategy but also honed his project management and team coordination skills. Ash's ability to combine technical expertise with editorial oversight is further bolstered by his knowledge of blockchain analysis tools such as Etherscan, Dune Analytics, and Santiment. These tools have provided him with the data necessary to create well-researched, insightful articles that offer deeper market perspectives. Whether it’s tracking the movement of digital assets or analyzing blockchain transactions, his analytical approach adds value to the content he produces, ensuring readers receive accurate and actionable information. In the realm of content creation, Ash is not limited to just cryptocurrency markets. He has demonstrated versatility in covering other emerging technologies, market trends, and digital transformation across various industries. His in-depth research, coupled with a sharp editorial eye, has made him a sought-after professional in the freelance writing community. From developing editorial calendars to managing content delivery schedules, he has honed a meticulous approach to project management that ensures timely, high-quality work delivery. Throughout his freelance career, Ash has consistently focused on improving audience engagement through well-researched, insightful, and relevant content. His ability to adapt to the evolving needs of clients, whether it's enhancing the visibility of digital platforms or producing thought-provoking pieces for a wide range of audiences, sets him apart as a dynamic force in the field of digital content creation. His contributions have helped to shape a well-rounded portfolio that showcases his versatility, technical expertise, and dedication to elevating the standards of journalism in blockchain and related sectors.

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