[Digital Today Reporter Hyunwoo Choo] As the value of virtual assets (cryptocurrency) increases, centering on Bitcoin, concerns about the’Kimchi Premium’ are growing. Kimchi premium refers to a phenomenon in which domestic asset prices are traded at a higher price than overseas asset prices.
On the 4th (local time), Joseph Young, an analyst specializing in virtual assets, pointed out that the kimchi premium is prominent in the Korean virtual asset market through a coin telegraph article. He said that the kimchi premium rose from 6% in the last week of March to 11% in April.
As the asset price bubble will soon lead to a correction tax, he argues that the signal of an overheating asset price in Korea, one of the major virtual asset markets, is by no means positive news.
On the other hand, Ki-young Ju, CEO of CryptoQuant, refuted that the kimchi premium was not at a level of concern.
On his Twitter account, he said, “In 2018, Korean bitcoin trading volume reached 1.7% of the global bitcoin market volume. However, it is only 1.7% now, and the impact of the asset bubble in the Korean market on the global market is not significant. “No,” he explained.
Although there is a possibility that Bitcoin will also decline to some extent due to the recent overheating, there will be no significant adjustments, Ju Ji-young believes. “The inflow of institutional investment has strengthened Bitcoin’s fundamentals considerably. It is very unlikely that it will fall below $52,000.”
However, he said that the overheating of the Korean virtual asset market is a level of concern. He pointed out that he is concerned about damage caused by investments, such as indiscriminately asking for new, highly volatile coins.
Remember when the $BTC market collapsed with a 50% kimchi premium back in 2018?
Simply calculating the trading volume, the Korean market had 7.9% of the influence as of 2018 January, while today it is only 1.7%.
— Ki Young Ju (@ki_young_ju) April 4, 2021
Author/ Translator: Jamie Kim
Bio: Jamie Kim is a technology journalist. Raised in Hong Kong and always vocal at heart. She aims to share her expertise with the readers at blockreview.net. Kim is a Bitcoin maximalist who believes with unwavering conviction that Bitcoin is the only cryptocurrency – in fact, currency – worth caring about.