Bitcoin has managed to stabilize above $69,000 after a recent dip below $70,000. However, South Korea has experienced a significant increase in the premium for bitcoin.
The premium for bitcoin in South Korea had dropped below 1% after reaching close to 10% in mid-April. Recent data from cryptoquant.com shows that the premium is now on the rise. On June 4, the premium hit a low of 0.62% when global prices were nearly the same, but by June 6, it had climbed to 3.42%.
According to archived data from coinmarketcap.com on June 9, bitcoin was trading globally at $69,288 per unit, while on Upbit, the price was 2.658% higher at $71,130 per bitcoin. Similar premiums were observed on other platforms like Bithumb, Coinone, and Korbit. Ethereum also showed a premium of 2.69%, with global prices at $3,679 and prices on Upbit and other platforms at $3,778.
The unique market dynamics in South Korea, including the closed trading environment, high retail demand, lack of institutional players, and regulatory challenges, contribute to the supply-demand imbalances that result in bitcoin trading at a premium compared to global rates. This premium reflects the specific characteristics of South Korea’s crypto industry.
In the first quarter of 2024, the South Korean won surpassed the U.S. dollar in bitcoin trading volume. Currently, the won accounts for 2.07% of bitcoin trade volume over the weekend, while the U.S. dollar holds 7.85% of all bitcoin trades. Most bitcoin trades are conducted using U.S. dollar-based stablecoins.
As bitcoin stabilizes below its recent peak, the premium in South Korea provides valuable insights into the local market dynamics and investor behavior in different regions. This trend can offer important information for traders, as a high premium is often seen as a bullish sign. It indicates strong buying pressure in South Korea, which could potentially drive bitcoin’s price higher in the short term.
What are your thoughts on the rebounding premium in South Korea? Feel free to share your opinions in the comments section below.
