[Bitcoin Now] Falls to 78 Million Won Range... Burdensome Kimchi Premium

Kimchi Premium Rises to 20% This Month
Grayscale States "Will Convert Bitcoin Trust to ETF 100%"

[Image source=Yonhap News]

[Asia Economy Reporter Gong Byung-sun] The representative cryptocurrency Bitcoin has fallen to the 78 million KRW range. The so-called ‘Kimchi Premium’ growing larger appears to be the cause of the decline. However, the financial sector is announcing the launch of Bitcoin exchange-traded funds (ETFs) and expanding the cryptocurrency market size.

According to the domestic cryptocurrency exchange Upbit, as of 10 a.m. on the 7th, Bitcoin recorded 78.82 million KRW, up 1.13% from the previous day. It hit an all-time high of 79.5 million KRW earlier in the morning but also dropped to the 76 million KRW range.

The burden of the Kimchi Premium seems to have acted as a negative factor. The Kimchi Premium refers to the gap that occurs when domestic Bitcoin is traded at a higher price than overseas. Earlier this year, overseas Bitcoin was traded more expensively than domestic, but since this month, the Kimchi Premium has risen to 20%. Ha Daehun, a researcher at SK Securities, said, “A high Kimchi Premium is certainly a burdensome factor, and in the process of narrowing the premium gap, the domestic Bitcoin price may be adjusted. However, since market leadership has shifted to institutional investors and overseas, it will not lead to a sudden trend reversal.”

Although Bitcoin has declined, the financial sector is focusing on launching Bitcoin ETFs. On the 5th (local time), U.S. asset management company Grayscale announced on its blog that it would focus on converting its Bitcoin trust products 100% into ETFs. Michael Sonnenshein, CEO of Grayscale, said, “We have believed that ETFs would be launched in the market, so since launching the Bitcoin trust in 2013, we have structured the product with ETFs in mind.” James Seyffart, a researcher at Bloomberg Intelligence, a research institution under Bloomberg, explained, “If converted to an ETF, customers holding Grayscale’s Bitcoin trust will no longer have to endure a management fee of about 2% and a six-month lock-up period.”

A group representing the interests of cryptocurrency-related companies is also expected to be formed. Yesterday, the U.S. media Wall Street Journal (WSJ) reported that major U.S. asset management firm Fidelity, mobile payment company Square, U.S. cryptocurrency exchange Coinbase, and other financial companies plan to create a group to intervene in cryptocurrency regulation issues. This group, called the ‘Crypto Innovation Council,’ is expected to lobby policymakers, conduct research projects, and represent voices advocating for cryptocurrencies and related technologies. Fred Ehrsam, former president of Coinbase, said, “Cryptocurrency is currently at an important turning point,” and added, “The council will be composed of four initial members and a board of directors to be additionally appointed.”

This content was produced with the assistance of AI translation services.