Bitcoin’s Kimchi Premium Soars! What You Need to Know Before It’s Too Late!

by

It appears that the Bitcoin Kimchi Premium index has decided to throw a rather extravagant party, hitting a three-year high, all thanks to a delightful cocktail of economic factors, including the robust U.S. Dollar and the ever-looming specter of global trade wars. Who knew economics could be so thrilling? 🎉

Our dear Bitcoin Kimchi Premium has spiked to a staggering 11.9%. This premium, my friends, is simply the price gap between Bitcoin (BTC) in the land of kimchi—South Korea—and the rest of the globe. It’s like a fancy restaurant charging extra for the ambiance! 🍽️

Now, this increase suggests that there’s a solid domestic demand for the asset, even as prices globally are doing their best impression of a limbo dancer—going lower and lower. 🕺

Even as BTC’s price has plummeted to a mere $93,900, South Korean traders are still paying a princely markup. It’s as if they’ve mistaken Bitcoin for a rare vintage wine! 🍷

Meanwhile, the high U.S. Dollar Index is adding a bit of downward pressure on BTC’s price globally, amidst a massive Trump-tariff sell-off in the Asian markets. It’s like watching a game of musical chairs, but with more tariffs and fewer chairs! 🎶

CryptoQuant CEO Ki Young Ju, in a moment of clarity, believes that the surge in BTC’s “Kimchi Premium” isn’t due to Korean traders diving in to buy the dip; rather, it’s BTC being converted to USD instead of the Korean Won. This suggests that relatively few Koreans are cashing out BTC for their fiat, and similar patterns may be playing out in other markets. It’s a bit like trying to sell ice to Eskimos—everyone’s just holding on! ❄️

#Bitcoin Kimchi Premium is 12% right now—a three-year high. The main reason for BTC drop seems to be the strong DXY.

— Ki Young Ju (@ki_young_ju) February 3, 2025

Asian markets slump

On the first of February, our dear friend Donald Trump decided to impose tariffs as part of his protectionist measures, aiming to protect domestic industries through taxes and restrictions on foreign goods. He slapped a 25% tariff on imports from Mexico and Canada and a 10% tariff on Chinese products. Tariffs are set to take effect at the ungodly hour of 12:01 a.m. EST on Tuesday. Who needs sleep, right? 😴

According to The Tribune, Hong Kong’s Hang Seng index took a nosedive of 2.07%, while all the other Asian indices—including Japan’s Nikkei 225 index—tumbled over 2.27%. The KOSPI index of South Korea fell 2.87%, and Taiwan’s weighted index dropped 3.74%. Even the Indian stock futures are feeling the pinch from the tariff impact. It’s a veritable market meltdown! 🔥

To elucidate the current situation unfolding in the Asian stock market, Daniel Yan took to X on February 3, declaring it was “another typical weak Monday.” The large sell-off reflects Asia’s vulnerability to protectionist policies by the U.S. and the growing concerns about global economic instability. It’s like watching a soap opera, but with more drama! 📺

Sell-off: another typical weak Monday driven by low liquidity and CTAs chasing – Asia market these days can’t take any negative news nor apply independent thinking.

The tariffs won’t lead to much productivity shock or inflation shock for the U.S. – market will recover soon.

— Daniel Yan (@_D_Y_A_N) February 3, 2025

Protectionism, in the form of tariffs and quotas, has a long and illustrious history dating back to the Smoot-Hawley Tariff Act of 1930, which only served to exacerbate the Great Depression. Ah, history, always repeating itself! 📚

The wider market slump coincides with the crypto market crash, with over $2 billion in liquidations on exchanges—truly the greatest single-day event in history. It’s like a bad day at the races! 🏇

However, analysts such as Ansem remain optimistic that the stock and crypto market would revive if Trump’s diplomatic discussions with Canada and Mexico on tariffs do not go “horribly wrong.” Fingers crossed,

Read More

2025-02-03 10:57