Recently, the 'Kimchi premium,' which had been quiet in the domestic virtual asset market, has reemerged. The Kimchi premium refers to the situation where the price of virtual assets traded domestically is higher than that on overseas exchanges. Consequently, the number of investors seeking overseas virtual asset exchanges is increasing. By using overseas exchanges, investors can purchase a variety of virtual assets that are not listed on domestic exchanges. It is also known that a considerable number of investors have entered overseas exchanges through investments in 'Trump Coin.'
According to the premium index of the domestic virtual asset exchange Upbit on the 20th, the Kimchi premium for major virtual assets exceeded 5% as of 10 a.m. that day. The premiums were ▲Bitcoin 5.5% ▲Ethereum 5.1% ▲Ripple 5.8% ▲Tether 5%. Specifically, Bitcoin is trading about 7 million won more expensive in the domestic exchange (15.4 million won) compared to the overseas exchange (based on CoinMarketCap, at approximately 14.7 million won). The Upbit premium index shows the price differences between Upbit and other exchanges, allowing one to understand the price differences between domestic and overseas markets based on the global market tracking site CoinMarketCap.
In particular, the Kimchi premium for Solana reached 6.5%. This means that Solana, which is trading at about 354,000 won overseas, is being traded at around 370,000 won domestically. This is due to a sharp increase in interest in the virtual asset Solana after former President Trump issued a meme coin called 'Official Trump' through the Solana network just before his inauguration. Since Official Trump is not listed domestically, many investors are purchasing Solana as a substitute.
As of early this month, the Kimchi premium was below 1%, but it reached its highest level in a month as domestic investor sentiment consolidated a day before the inauguration of the pro-virtual asset former President Trump. Last month, during the martial law situation, domestic virtual asset prices were even lower due to the unstable local situation, leading to the emergence of an 'inverse Kimchi premium.' The Kimchi premium arises from the differences in demand and supply among exchanges. The domestic virtual asset market, in particular, has a closed structure with limited liquidity relative to demand and supports only trading in won, leading to greater price volatility.
As the price difference between domestic and overseas exchanges widens, investors are beginning to show interest in overseas exchanges. The high Kimchi premium is acting unfavorably for domestic investors. If virtual asset prices adjust, they could drop by the amount of the Kimchi premium, and price declines are also possible when exchange rates are adjusted. In particular, the Trump meme coin issued two days ago has not yet been listed on domestic exchanges. As a result, domestic investors are sharing methods for using overseas exchanges to purchase Official Trump.
Using an overseas exchange is simpler than one might think. Investors who have registered with a domestic exchange can sign up for a desired overseas exchange and complete that exchange's KYC (Know Your Customer) procedure. They can then purchase Bitcoin or Tether, etc. with won on the domestic exchange and transfer it to the respective virtual asset wallet on the overseas exchange, which they can use to buy the desired virtual asset. This process is necessary because overseas exchanges do not support trading in won.
Domestic investors who learned how to use overseas exchanges through Trump Coin are saying that there is no reason to purchase virtual assets domestically. Overseas exchanges generally have lower fees than domestic ones and offer a wider variety of virtual assets. Additionally, features like abundant liquidity and immediate price reflection, which are more accurate than domestic charts, along with the fact that futures trading is possible, are also highlighted as attractions of overseas exchanges.
An industry insider noted, 'Once individuals enter the world of virtual asset investment, demand for overseas exchanges inevitably arises due to various product lines and liquidity.' He added, 'Data shows that a significant number of domestic investors utilized Binance, Bitget, and Bybit last year.' He stated, 'With a rapid increase in investors encountering overseas exchanges to purchase Trump Coin, the number of investors seeking overseas exchanges will further increase.'