The bitcoin price has surpassed $17,000 in South Korea, peaking to $17,500 earlier today, on December 7.
At the time of reporting, the average price of bitcoin in the global market across major regions including the US and Japan remains at $13,770. In the South Korean bitcoin exchange market, bitcoin is being traded with a staggering $3,230 premium.
Bitcoin Price Surpasses $17,000 on Bithumb, South Korea’s Largest Bitcoin and Cryptocurrency Exxchange
According to cryptocurrency market data provider CryptoCompare, the South Korean bitcoin exchange market accounts for less than seven percent of the global bitcoin market share. That is, only a fraction of the market share of the US and Japan, two of the world’s largest bitcoin markets.
Over the past few months, the demand for bitcoin from the South Korean traditional finance sector has grown at a rapid pace, with institutional investors, casual traders, and individual investors rushing to invest in bitcoin and the cryptocurrency market.
Korbit founder and CEO Tony Lyu explained that like Japan, once many individuals are invested in a particular asset, and the demand for it surges, everyone within the market rushes to invest in that asset. A similar trend has occurred in the South Korean bitcoin market and the demand for the cryptocurrency has surged to a point in which the South Korean deputy prime minister issued an official statement on the matter.
“Word just spreads really fast in Korea. Once people are invested, they want everyone else to join the party. There’s been this huge, almost a community movement around this,” said Lyu.
But, because the South Korean bitcoin market only accounts for 6.8 percent of the global bitcoin market and the demand for the cryptocurrency is surging at an unprecedented rate, the limited availability and supply of bitcoin is forming significantly high premiums.
Frequently, the South Korean and Japanese bitcoin markets have portrayed a premium of over 5 percent in periods wherein the price of bitcoin surges by at least 5 to 10 percent. Currently, the South Korean bitcoin market is showing a premium of nearly 20 percent.
George Kikvadze, a highly regarded bitcoin investor and the vice chairman at major bitcoin mining firm Bitfury, stated that taking advantage of the arbitrage opportunity between South Korea and the global market is “easy money.”
“$2,000-$2,500 gap between Western exchanges and South Korea ($16,000) Love the arbitrage! Easy money!” said Kikvadze.
However, taking advantage of the arbitrage opportunity in South Korea is very difficult, and it is impossible without having a local person in South Korea processing trades on behalf of a foreign exchange account holder.
To begin with, South Korean cryptocurrency exchanges have strict Know Your Customer (KYC) and Anti-Money Laundering (AML) policies. In addition to the requirements on foreign exchanges, South Korean trading platforms require users to submit proof of income and carry out a face-to-face interview.
Hence, for a foreign investors to purchase bitcoin elsewhere and sell it in South Korea, three conditions have to be met. First, a fully verified foreign exchange account is needed. Then, a fully verified South Korean account is needed, which means a South Korean bank account is necessary, which is also difficult to obtain for foreigners. Lastly, a method of transferring cash out of South Korea is necessary.
Featured image from Shutterstock.
Sia Network Releases Hard Fork Code to Block Crypto Mining Giants
The sia blockchain network has released the formal code for an imminent hard fork that will block miners using hardware produced by Bitmain and other major manufacturers.
David Vorick, founder and
North Korean Hacking Group Lazerus Stole $571 Million in Cryptos: Report
North Korea's infamous hacking group, dubbed Lazarus, has managed to steal over half a billion dollars in cryptocurrencies, a report indicates.
According to an article published Friday by The Next
Bitcoin's Price Breaks Through Key Support As Stocks Go South
Bitcoin (BTC) has dropped out of the tight trading range seen recently, paralleling losses in the U.S. stock markets.
The leading cryptocurrency, which was trapped in a triangle pattern (narrowing
Chip Maker TSMC Forecasts Weaker Crypto Mining Demand in Q4
Chip-making giant Taiwan Semiconductor Manufacturing Company (TSMC) has predicted weak demand for processors from cryptocurrency miners for the fourth quarter.
TSMC, the primary supplier for crypto
Crypto Exchange Huobi Now Lets Users Swap Between 4 Different Stablecoins
Huobi, the Singapore-based cryptocurrency exchange, has just launched a new solution that enables users to switch between different types of fiat currency-pegged cryptocurrencies, or stablecoins, in e
Bitcoin Price Eyes Triangle Breakout Above $6.4K
Bitcoin (BTC) is again trading in a narrowing price range above $6,400, but the lateral trading may soon give way to a rally, according to technical studies.
The price consolidation comes after Mon
Security firm G4S Has Launched a Crypto Custody Service
U.K.-based security services company G4S now offers a crypto custody service aimed to protect investors' holdings of digital assets.
Announcing the move in a press release on Oct. 16, the firm said
Gates Foundation Partners With Former Ripple CTO's Blockchain Project
The Bill and Melinda Gates Foundation has partnered with blockchain startup Coil as part of its mission to provide payment services for the unbanked.
The news comes via a tweet from Miller Abel, th