• The Kimchi ‘Bonus’ Is Back as Korean ‘Ant’ Investors Re-Enter the Market

  • Data show that South Korean investors are returning to the markets after weeks of inactivity. However, for the first time in two years, the kimchi premium has flipped on its head, resulting in a small “kimchi bonus” and slightly lower bitcoin (BTC) and altcoin prices on most major exchanges.

    Much was made earlier this year of the resurgence of the kimchi premium, a phenomenon in which volume and demand soar on South Korean exchanges that prices rise higher than the global average on platforms such as Binance and Coinbase.

    Some more opportunistic individuals attempted to profit – by purchasing BTC and altcoins over-the-counter in neighboring countries such as China and “dumping” the coins on domestic exchanges for profits of up to 10% or more. As a result, the government and customs officials began to crack down, issuing massive fines to offenders they identified.

    The premium has since been reduced. It had dropped to 1% just a month ago.

    But, for the time being, the tables have flipped, albeit only cosmetically, with BTC selling for less than a percentage point less on Upbit than on platforms like Binance and Bybit, according to Scolkg data at the time of writing. Ethereum (ETH) was trading at a 0.8 percent discount to Binance/Bybit, while the Ripple-affiliated XRP token was trading at a 1.2 percent discount to the rest of the world in Seoul.

    The margin is still small, but the “kimchi bonus” has already reached the level that prompted a cryptocurrency analyst speaking to Cryptonews.com in 2019 to coin the term in the first place.

    According to News1, Sports Seoul, and Maeil Kyungjae, retail investors (dubbed “ants” by the media) were resuming trading as prices rose this week – though the progress of the infrastructure bill in the United States could potentially slow this growth over the weekend.

    According to Dunamu’s (Upbit’s operator) Fear-Greed index, the market is currently in full “greed” mode – and on its way to “very greedy.”

    And, according to CoinGecko data, trading volumes at the Bithumb exchange have increased rapidly in the last week, as have rival platforms such as Coinone and Upbit.

    Bitcoin traders, on the other hand, appear to be less hesitant to move, with one or more altcoins outperforming BTC in volume stakes on both Bithumb and Upbit.

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