Kimchi premium
The Kimchi premium is the persistent price difference where crypto trades at higher prices on South Korean exchanges compared to global markets.
Capital controls, limited arbitrage channels, and strong local demand can cause regional price premiums. The phenomenon varies with market conditions and policy.
"During bull markets, BTC sometimes trades several percent higher on KRW pairs than on USD pairs."
"Tight capital controls and KYC requirements limit cross-border arbitrage that would otherwise close the gap."
Premiums affect investor behavior, exchange volume, and arbitrage strategies; they also highlight frictions that decentralization aims to reduce.
"Arbitrageurs face legal and logistical hurdles moving funds between regions fast enough to exploit price gaps."
"Stablecoins and P2P markets can narrow premiums by easing cross-border settlement."
Related Terms
Cryptocurrency Exchange
→A platform that facilitates the buying, selling, and trading of cryptocurrencies. Exchanges can support crypto-to-crypto or crypto-to-fiat transactions and serve as crucial infrastructure in the digital asset ecosystem.
Jurisdictional arbitrage
→Jurisdictional arbitrage is the practice of choosing favorable legal or regulatory environments for operating crypto businesses or protocols.
Bid-Ask Spread
→The difference between the highest bid and lowest ask price for an asset.
All terms and definitions may update as the Cryptionary improves.
