What Is the Kimchi Premium?
A complete guide to why the same coin carries a different price in Seoul, and what that gap actually tells you.
The short answer
The Kimchi Premium is the difference between the price of a cryptocurrency on a South Korean exchange and its price on the global market, expressed as a percentage. If Bitcoin costs 2% more on Upbit than it does on Binance once you convert won to dollars, the Kimchi Premium is +2%.
The name comes from kimchi, the Korean staple, and dates to the 2017–2018 bull market when the gap became large enough that international press started writing about it. You can see the current figure for ten major assets on our live tracker.
Why a price gap can exist at all
In an efficient market this gap should not survive. If an asset is cheaper in one place than another, traders buy where it is cheap, sell where it is expensive, and the two prices converge within seconds. That mechanism — arbitrage — is what normally keeps Bitcoin priced almost identically on every major exchange in the world.
Korea is the exception, and the reason is not really about crypto. It is about how money moves in and out of the country.
1. Capital controls
South Korea regulates cross-border capital movement. Sending large sums abroad involves documentation and reporting requirements, and moving money out specifically to buy crypto overseas has been discouraged and at times blocked outright. An arbitrageur who spots a 5% premium cannot simply wire millions of dollars out and start trading.
2. Real-name banking and residency
Korean exchanges must tie each account to a verified real-name bank account at a partner bank, held by a Korean resident. A foreign trader generally cannot open a Korean exchange account, deposit won, and sell into the premium. The buyers inside the walled garden are overwhelmingly domestic.
3. Time and price risk
Even where a route exists, it is not instant. Moving value into Korea, converting it, trading and moving proceeds back can take hours or days. The premium can close — or invert — while the money is in transit. A 3% edge is not attractive if the underlying asset can move 10% overnight.
Put together: demand inside Korea can rise faster than supply can be brought in from outside, and the price gap persists instead of being instantly competed away.
How the premium is calculated
The calculation is a currency conversion and a comparison:
premium % = (korean_price_krw ÷ (global_price_usd × krw_per_usd) − 1) × 100
The interesting question is which exchange rate to use for krw_per_usd, and different
trackers answer it differently. This is the single biggest reason two Kimchi Premium sites can show
different numbers at the same moment.
Bank rate versus stablecoin rate
One option is the official USD/KRW rate published by banks. It is authoritative, but it is fixed once per business day and does not exist at all on weekends — while crypto trades continuously. Using it means your "live" premium is partly driven by a stale number.
The other option is the rate implied by a stablecoin market: what one USDT costs in won on a Korean exchange right now. This updates in real time, and it reflects how the trade actually happens, since value crossing into and out of Korean crypto markets typically moves as a stablecoin rather than as a bank transfer.
What makes the premium widen
- Retail enthusiasm. The clearest driver. Korean retail participation is high and can surge quickly, pushing local bids above global levels.
- Momentum. Premiums tend to expand during sharp rallies and compress or invert during sell-offs, because domestic buying is more reactive than the cross-border supply that would offset it.
- Tighter capital controls. Anything that makes moving money harder makes the gap stickier.
- Asset-specific enthusiasm. The premium is not uniform. A coin with a strong local following can carry a much wider premium than Bitcoin at the same moment — which is why we track each asset separately.
The reverse premium
The number can go negative. A "reverse premium" or Kimchi discount means the asset is cheaper in Korea than abroad. This typically appears after heavy local selling, or when domestic sentiment turns down faster than the global market. In calm conditions the figure often sits near zero and oscillates between small positive and small negative values.
Historical context
The premium is best known for its extremes. During the January 2018 peak of the previous cycle, the Bitcoin premium in Korea reached levels above 50% — wide enough that some global price indices temporarily excluded Korean exchanges from their averages, because including them distorted the worldwide price. Very wide premiums have historically clustered around periods of intense retail speculation, which is why the figure is often read as a sentiment indicator rather than a trading signal.
How to read the number
- Near zero: normal. Markets are connected well enough for the moment.
- Persistently positive and widening: local demand is outpacing supply — often associated with heated retail sentiment.
- Negative: local selling pressure, or Korean sentiment cooling ahead of the global market.
- Diverging across assets: the enthusiasm is asset-specific rather than market-wide.
Why you probably cannot trade it
This is worth stating plainly. A visible premium is not free money. To capture it you would need a legal route to move capital into Korea, an exchange account you are eligible to hold, the ability to convert and withdraw within limits, and enough tolerance for price movement during the round trip. For most people, one or more of those is unavailable, and attempting to work around capital controls carries legal risk. Read our terms and disclaimer — nothing here is investment advice.
The premium is far more useful as a read on market conditions than as a trade.
Frequently asked questions
Why do different sites show different Kimchi Premium numbers?
Almost always the exchange rate. A site using the daily bank rate will diverge from one using a live stablecoin rate, especially on weekends. Choice of Korean exchange and of global reference exchange also matters, though less.
Is the Kimchi Premium the same for every coin?
No, and the differences are informative. Compare assets on the tracker — a wide spread between coins usually means the local enthusiasm is concentrated rather than broad.
How often is the data updated?
Prices are sampled once per minute. Every sample is stored permanently, which is what allows the daily high, low, open and close of the premium itself to be reconstructed on each asset page.
Does a high premium mean the price will fall?
Not mechanically. Wide premiums have historically coincided with speculative peaks, but the premium can stay elevated for extended periods and is not a timing tool. Treat it as one input among many.