A new Chainalysis study shows that the rising Korea Premium Index is a big reason why South Korea’s bitcoin market is booming. This measure shows a big rise in the price difference between South Korean exchanges and global markets for cryptocurrencies like Bitcoin and Ether.
Premiums are going up because demand is growing and institutions have more power.
The Korea Premium Index has gone up because traders in Korea are willing to pay more for digital goods than traders in other countries. This trend is especially clear when the market is unstable and both individual and large buyers are looking for ways to make money from price differences.
A big part of this price rise is due to institutional buyers. They buy coins when prices are lower around the world and sell them when prices are higher on South Korean sites. This is called arbitrage. The local market’s price goes up because of this action.
Effects on the way local markets work
Traders in South Korea often do business on local exchanges. According to the Chainalysis study, the Korea Premium Index is closely linked to the amount of money moving from local to global exchanges. As the measure goes up, it shows that both local demand and trade by institutions are going up.
The Financial Supervisory Service (FSS) report also shows that workers at Dunamu, the company that runs the Upbit exchange, make more money than their peers at big South Korean banks. This shows how profitable the bitcoin business is in the country.
