What is the kimchi premium?
The kimchi premium is how much more (or less) a cryptocurrency costs on South Korean exchanges than on exchanges elsewhere, after converting won to dollars.
How it is measured
Take the price of Bitcoin in Korean won on Upbit, convert it to US dollars, and compare it with the dollar price on large global exchanges. If Upbit is higher, the premium is positive; if lower, it is negative and people call it a "reverse premium".
Which exchange rate you use matters. The bank reference rate (we use the European Central Bank's daily USD/KRW rate) shows the gap against the official rate. Upbit's own price for USDT, a dollar stablecoin, shows the gap inside the crypto market itself. When the two numbers differ, part of the premium is really a premium on dollars, not on Bitcoin.
Why the gap exists
- Korean exchanges trade against the won and most Korean users cannot easily move money abroad, so local demand is partly cut off from global supply.
- Moving coins between countries takes time and costs fees, and Korean rules on foreign exchange limit large transfers.
- Waves of retail buying in Korea push local prices up faster than global arbitrage can pull them back.
How big has it been?
The premium was widely reported above 40% in January 2018 and around 20% in spring 2021, both near market peaks. In calm markets it usually stays within a few percent, and it can turn negative.
Can you profit from it?
Rarely, and not as simply as the number suggests. Buying abroad and selling in Korea involves withdrawal fees, network transfer time, exchange limits and Korean foreign-exchange law, which restricts sending money out to buy coins. People have been prosecuted for illegal money transfers tied to premium trading. SpreadAtlas shows the gap as market information only. See the live board on price gaps.