A reverse premium phenomenon is appearing in which bitcoin traded on domestic virtual asset exchanges is priced 2 million won cheaper than quotes on overseas exchanges.
According to CoinYong, a real-time virtual asset price comparison community, on the 4th bitcoin traded at 96.39 million won on the domestic exchange Upbit in the afternoon. That is about 2.4% lower than Binance Holdings Ltd., the world's largest virtual asset exchange.
The phenomenon in which coin prices traded on domestic virtual asset exchanges are formed higher than prices on overseas exchanges is called the "kimchi premium" (a portmanteau of Korea's representative dish kimchi and premium). Conversely, when domestic exchange prices are lower, it is called a reverse premium.
Typically, the kimchi premium appears when Korean investors' virtual asset buying is stronger than overseas. Conversely, when investor sentiment weakens, a reverse premium occurs. At one point, transaction volume on domestic virtual asset exchanges even exceeded KOSDAQ turnover, but at the end of last month the turnover at the five major domestic virtual asset exchanges shrank to only about 2% of total KOSPI turnover.