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Bitcoin Businesses

Bitcoin is Trading Near $66,000 in South Korea as 'Kimchi Premium' Returns (theblockcrypto.com) 56

Posted by msmash from the how-about-that dept.
Bitcoin is trading near $66,000 levels in South Korea as "Kimchi Premium" has returned. From a report: Kimchi Premium is the spread between bitcoin's price on South Korean crypto exchanges and Western exchanges. Bitcoin is currently trading at around $66,200 on Bithumb, according to TradingView. That is whopping about 15% or $9,000 higher than bitcoin's price of around $57,000 on Coinbase. Ether (ETH) is also trading higher at around $2,350 on Bithumb compared to $2,020 on Coinbase, according to TradingView. The Kimchi Premium suggests rising demand for bitcoin and ether in South Korea as the cryptocurrency market continues to soar worldwide.
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Bitcoin is Trading Near $66,000 in South Korea as 'Kimchi Premium' Returns More

Bitcoin is Trading Near $66,000 in South Korea as 'Kimchi Premium' Returns

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  • Professional investors call this an arbitrage opportunity. [wikipedia.org] The fact there is such a huge opportunity tells me something is wrong...
    I suspect this is because Bitcoin transactions are too slow to take advantage of it.
    • My guess is that you would need to accept the Korean won as payment if you want to "arbitrage" that "$66,000" premium.
      • In fact the article states non Korean residents can't open accounts on their exchange and they also pay in Korean Won.

        • In fact the article states non Korean residents can't open accounts on their exchange and they also pay in Korean Won.

          The article? People read those?

          There is still a substantial money making opportunity for those people with the right credentials.

        • Naive question here - how is this possible with bitcoin? I thought one of the features of the network was making that sort of thing impossible?

          • Re: (Score:1)

            by pbry4n ( 7208566 )
            The *exchange* market is open; there's an opportunity to buy Bitcoin on one market and sell on another.
          • It isn't the Bitcoin network that is doing this, it is the exchange.

            What you accept in trade for your BTC or how much of it is of no concern of the blockchain.

          • Re: It's Called Arbitrage... (Score:5, Interesting)

            by Synonymous Cowered ( 6159202 ) on Monday April 05, 2021 @03:36PM (#61239712)

            As I understand the article, these are cash-to-BTC (and vice versa) transactions. BTC's network only handles the BTC side of a transaction. You still need to handle the other half of the transaction elsewhere. For a store, you need to show up at the store or they need to ship your goods to you. For a currency transaction, someone needs to give you the cash or deposit it in your bank account. This is where the exchanges come in. If you are buying BTC, they facilitate getting the money from your bank account or credit card and getting it to whoever is selling the BTC (and the opposite way around if you are selling BTC). And regardless of buying or selling, they facilitate the 2 of you finding each other.

            There is no requirement to use these exchanges. You can go elsewhere. But then you run into issues with differing laws in differing nations, and who you can trust to actually get you the money. You can certainly go on craigslist and setup the transaction, meet in person, handover a suitcase of cash, and then just chill together until for an hour or so until the required number of confirmations have happened. Understandably people don't want to do this, and they don't want to deal with laws of multiple countries, and they don't want to risk it with some unknown exchange. So they go with what everybody knows. And for that, you pay whatever the going rate is. If there are more people on that exchange buying than there are people selling, then the price rises above typical value.

            • If there are more people on that exchange buying than there are people selling, then the price rises above typical value.

              What's surprising is there is a huge opportunity to profit by buying from one exchange, and selling on another. That's what arbitrage is. It appears there is some sort of barrier preventing those transactions from occurring.

              What is that barrier? Some people mentioned Korean citizenship as a requirement for those exchanges. However, a lot of other exchanges don't have those sorts of requirements. A Korean citizen should be able to purchase Bitcoin at a discount on a US exchange, and sell it on the K

              • Yes, I had the same thought, so I looked it up: https://www.investopedia.com/t... [investopedia.com]

                Investors in South Korea can only profit from the kimchi premium by buying Bitcoin abroad and reselling it in South Korea.
                However, capital controls and financial regulations make profiting from the kimchi premium difficult for South Korean investors.

                It goes on to explain a lot of it in more detail.

        • So now your auntie is worth $6000/BTC transaction. "Hello, auntie...". "Yes, I know it's been a while since I've called and...". "Yes, auntie, so let me explain about...".

          Half an hour later. "OK, auntie. Here's the part where I explain arbitrage... and...".

          Two hours later. "Yes. I love you too. OK. Bye".

          Sigh... I should have called my cousin.

        • Re: (Score:2)

          by invid ( 163714 )
          South Korean citizens with access to outside bitcoin exchanges should be buying up bitcoin and selling them on the South Korean exchanges. One would think this sort of behavior would eventually balance out the value of bitcoin.

          • South Korean citizens with access to outside bitcoin exchanges should be buying up bitcoin and selling them on the South Korean exchanges. One would think this sort of behavior would eventually balance out the value of bitcoin.

            Exactly. Forex traders would exploit price dependencies that are a fraction of a percent within milliseconds. A 15% price discrepancy long enough to write an article is unheard of.

            There's a vast amount of money to be made, but for some reason it's not happening.

    • Re: (Score:2)

      by gweihir ( 88907 )

      I suspect this is because Bitcoin transactions are too slow to take advantage of it.

      Probably. They are also hugely expensive and you have to bet and may just find that there are not any takers, making things even slower. The whole thing is a half-baked mess.

    • It's due to the difficulty getting the fiat out of the exchange, then out of the bank, and then out of the country, and then doing this in the amount of millions of dollars per day. If you try, you'll find your account frozen fast. It's not complicated. That's all that's happening. So instead the price pressure is balancing from petty trades from opportunistic small men. Not big investors. Not yet, at least... Also some asian exchanges tack a 1% fee on withdrawals. That is also a limiter. You'd pretty much

  • What is this doing on slashdot? (Score:5, Informative)

    by delirious.net ( 595841 ) on Monday April 05, 2021 @02:24PM (#61239438)
    If I want prices I'll go the sites for that.
    The value of $cryptocurrency isn't slashworthy.

    • Re: (Score:1)

      by Anonymous Coward
      You ever consider not whining for the sake of whining?
    • I've been reading about the impending doom of bitcoin on slashdot for the last 10 years...

    • Just another weekly Bitcoin Monday shill article. /. has been excessively reporting on BitCoin for years.

      • I think comments like you will feel very embarrassed in a decade.
        • Many of us are stuck something like 20 years ago, expecting tech/sciences articles on /. instead of articles about stock market.

          • Re: (Score:1)

            by Anonymous Coward
            Once the internet was capable of transmitting text, use of postal mail largely subsided.
            Once the internet was capable of transmitting music, the record industry found itself losing its footing.
            Once the internet was capable of transmitting video, Blockbuster and the cable television business suffered.
            Now that the internet is capable of transmitting money, what do you think could happen to traditional hard currencies?
            This is a relevant technology, even if you personally refuse it.

        • Bitcoin has _many_ problems:

          * Finite amount
          * Pathetic 7 transactions / second [wikipedia.org]
          * Hyper-inflation
          * Massive waste of energy to "mine" it

          It will never be a replacement cryptocurrency for hard currency but keep shilling it.

    • The value of $cryptocurrency isn't slashworthy.

      You don't understand the article then. It's not your fault, it's not explained well for people unfamiliar with financial markets.

      This article is about a market failure. [wikipedia.org] The efficient-market hypothesis [wikipedia.org] states this kind of condition shouldn't exist in a financial market that operates efficiently. Something is broken.

    • Re: (Score:2)

      by leonbev ( 111395 )

      You've seen msmash's post history, right? After looking at it, I think that pumping Bitcoin is part of his Slashdot retirement plan.

  • How do you hedge against money printing? Gold was the old analog way. Maybe, now, we have something better with Bitcoin.

  • Fortunately I have no use for either, especially a currency that requires the internet for me to use. You have to be a moron to not understand how bad that can turn out. It's like electronic voting, people are always foolishly optimistic when it comes to moving over mission critical system without thinking of long term repercussions.

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