‘Kimchi Premium’ continues rising as more South-Koreans invest in Bitcoin and their stock market drops

If we take a look at global stock markets and their performance over the past year, we see that there is hope in the United States (the Dow has already risen by some 15% so far this year), nervousness in Europe (the Netherlands and Germany are still doing well, but France is declining) and panic is gradually starting to break out in some Asian countries (India is flat this year just like Japan, Russia is falling and inflation is rising ever faster).

The stock markets in South Korea are down some 10% so far this year (on top of that the Jeju airplane crash of this morning is also not good news for airplane shares).

The KOSPI (Korea Composite Stock Price Index) as it is known, is suffering greatly from the current political instability. The president recently declared a state of emergency in his country in order to remain in power and although peace seems to have returned, no one knows what to do next.

KIMCHI PREMIUM SURGES AS SOUTH KOREA TURNS TO BITCOIN DURING POLITICAL CHAOS

Bitcoin’s Kimchi Premium has risen to 5%, fueled by investor demand for stability.

Capital controls and local market isolation have intensified the premium, as traders look to Bitcoin for security.… pic.twitter.com/YXRZ5FApYX

— Crypto Town Hall (@Crypto_TownHall) December 28, 2024

The value of the local currency, the Korean won, is continuing to decline compared to other major fiat currencies such as the dollar and the euro. Residents of Seoul, Busan and Incheon are therefore looking at alternative investment options such as crypto.

The ‘Kimchi Premium’, or the difference between the price for Bitcoin in Seoul and other capitals of Western Democracies, is therefore once again reaching unprecedented heights as more and more South Koreans purchase crypto to safeguard their savings. What does this mean for the future?

More crypto than stocks

The fact that South Koreans are big fans of crypto is nothing new, but due to the rise of the Bitcoin price and the political instability in the country, it is taking on unprecedented proportions this year.

Back in March, when Bitcoin traded above $70,000 for the first time, crypto was traded in greater volumes than stocks on several days. In the land of Samsung, Hynix, LG and Hyundai, this was certainly remarkable.

This phenomenon was seen again in November, after Donald Trump’s victory in the American presidential elections. Currently some 30% of all South Koreans (especially Millennials and Gen-Z) own cryptocurrencies. As a result, the ‘Kimchi Premium’ is also growing.

When one Bitcoin was worth $94,000 at Coinbase in the United States yesterday, you paid $98,000 for that same Bitcoin on a South Korean platform (such as Upbit and Bithumb).

#UPDATE

South Korea’s Political Turmoil: A Perfect Storm for Bitcoin
The South Korean won has hit a 15-year low against the dollar, driving up the cost of buying Bitcoin by 3% compared to the US.

⏬⏬ pic.twitter.com/45OkxgNoln

— Beryl_La_Exquisita😍❤️ (@reina_berilo) December 29, 2024

It is also increasingly the case that a memecoin launched on one of the two major South Korean crypto platforms can consistently demonstrate spectacular trading volumes in the first days. Young people from Seoul prefer crypto over stocks, and that trend will only increase in 2025.