Persistent 'Coin Love'? 'Kimchi Premium' Continues Despite FTX Crisis

Domestic Coin Prices Higher Than Overseas and Trading Volume Not Decreasing
Domestic Exchanges' Reserve Ratio Exceeds 100%, Low Risk of Payment Default

[Asia Economy Reporter Lee Jung-yoon] Despite the global virtual asset exchange FTX bankruptcy incident, Koreans' 'love for coins' remains strong. Although the incident brought a winter to the coin market, the phenomenon where the price of the same coin is higher on domestic exchanges than overseas did not change.

According to virtual asset data company CryptoQuant on the 21st, the Bitcoin Kimchi Premium index was 0.55 on the 19th. This index has remained above 0 except for -0.3 on the 13th of this month, since the day before the FTX incident occurred on the 6th of last month. On the 12th of last month, it recorded 5.63, the highest figure since October 1. This index represents the percentage difference in Bitcoin prices between domestic and overseas exchanges. The higher the value, the higher the domestic price compared to overseas, indicating strong buying sentiment among Korean investors.

Bitcoin Kimchi Premium Remains Unchanged Despite FTX Incident / Data from CryptoQuant

Although the Bitcoin price, which was in the $20,000 range, dropped to $16,000?$17,000 after the FTX incident, it was traded at a higher price domestically than overseas. On Upbit, the top domestic exchange by market share, the Bitcoin price was 22 million KRW as of 9:15 AM on the 21st. On the global virtual asset market status relay site CoinMarketCap, it was recorded at 21.71 million KRW.

The Kimchi Premium index for Ethereum, the leading altcoin, was similar. From the 6th of last month, the index showed positive values except for -0.27 on the 13th of this month. On the 12th of last month, it soared to 5.77.

The reason the Kimchi Premium remains despite the FTX incident is interpreted as the domestic market being relatively unaffected except for the price decline. It was relatively free from the liquidity crisis of the exchange that caused a major shock. Domestic exchanges operating the KRW market have announced that they maintain a reserve ratio exceeding 100%. Therefore, unlike overseas cases such as FTX, there were no incidents where virtual assets deposited for coin trading could not be returned or were returned late due to exchange liquidity crises.

Domestic exchange trading volumes also showed little difference compared to before the FTX incident. According to the virtual asset market status relay site CoinGecko, Upbit's daily trading volume was $864.75 million (approximately 1.1118 trillion KRW) as of 9 AM on the 21st. This is even higher than the trading volume of $659.23 million on October 21, two months ago.

Looking at the KRW proportion in the total Bitcoin trading volume, Koreans' love for coins has not cooled due to the FTX incident. According to the virtual asset analysis platform Coinhills' 'Bitcoin trading volume by national currency,' the KRW share was 7.33%, ranking third after the dollar (68.61%) and yen (13.12%). It was higher than the euro (5.71%) and pound (1.34%). Excluding the dollar and yen, the share of Bitcoin trading volume by currency exceeds 40%.

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