Bitcoin is being traded at over $3,800 in South Korea, with a 33.5 percent premium. Currently, global average bitcoin price is $2,514, which is closest to the bitcoin price listed by the US exchange market at $2,533.
On May 12, CCN reported that bitcoin price surged past $2,070 in South Korea, when the global average bitcoin price was at around $1,800. During that time, the South Korean bitcoin exchange market demonstrated a 12.7 percent premium over other major markets such as the US, China and Japan.
Premium trading price of bitcoin in the South Korean bitcoin exchange market existed since 2015, with some of the market’s largest bitcoin exchanges including Bithumb and Korbit consistently demonstrating a 5 to 10 percent gap between exchanges in the US and China. That cap increased to 35 percent within 12 months, which currently is equivalent to $1,300.
At the time, analysts suggested that arbitrage opportunities exist in the South Korean market due to its size. Because of its low trading volume, limited number of investors and suppliers, analysts stated that the market is easier to manipulate and take advantage of in comparison to other global markets.
However, investors and traders started to re-evaluate the high premium trading price of bitcoin in the South Korean bitcoin exchange market as it overtook the Japanese and European bitcoin exchange markets to become the third-largest bitcoin exchange market in the world. With a 229 million daily trading volume, previous claims of analysts that South Korea was an easily manipulative market weren’t viable reasons behind the market’s high premium price.
On May 23, bitcoin investor and Adamant Research editor in chief Tuur Demeester stated that the chief information officer of South Korea’s 2nd largest exchange, Korbit, attributed the high premium price of bitcoin in the South Korean bitcoin exchange market to strict capital controls and Anti-Money Laundering (AML) policies.
“Talked to the chief information officer of [the South Korean exchange market’s] 2nd largest exchange, says that capital controls are making price arbitrage difficult,” explained Demeester, emphasizing that taking advantage over the South Korean bitcoin exchange market’s premium trading price is difficult.
Subscribe to Aba City Blog
Keep up to date on the latest content, here at Aba City Blog. Subscribe below.