Bitcoin (BTC) traded in South Korea at $ 5,000 more than other markets on WednesdayAs the cash flow controls continue to apply the “kimchi premium”. While Bitcoin was trading at $ 39,932 on Coinbase at press time, it was priced at $ 45,115 on the Korea-based exchange, Bithumb.
According to a recent statement from Bank of America Kimchi’s premium is the result of cash flow controls aimed at stopping the cross-border transfer of “hot money”.Reuters reports.
“The price of cryptocurrencies in Korea is persistently higher than international prices, suggesting that this is the result of effective capital controls that prevent effective price arbitrage both domestically and internationally. Korean capital controls allow the ‘kimchi premium’ to persist. “they said from Bank of America in a report on Tuesday.
Korea’s 12.5% premium over Bitcoin remains in place despite the currency’s recent 32% losses and signs of an increase in transfers to centralized exchanges. The Bank of America report found that daily cryptocurrency trading volumes in Korea reached new highs in the first quarter of 2021, exceeding 1,480 trillion won ($ 1.3 trillion).
While the demand for cryptocurrencies continues in South Korea, so does gold. Gold prices rose four days in a row before Tuesday, May 18. Reaching levels never seen since January.
The current price per gram of 68,200 won ($ 60.36) is 9.4% higher than two months agowhat the Korean Herald calls a sign of growing concern about inflation. Although it’s still way below historical levels, Korea’s inflation rate rose 1.5% in April alone. Since 2019, the inflation rate has risen from less than zero to 2.3%.