Bitcoin, the world’s biggest cryptocurrency, reached a record high of $110,000 on Thursday, backed by growing industry optimism. Trading denominated in Korean won neared its recent peak as well, hovering at around 150 million won ($108,700) as of press time.
Regulatory developments in the US stoked industry optimism that the country will shortly agree on its first regulations for digital assets, boosting investor sentiment for the cryptocurrency.
According to global price-tracking platform CoinMarketCap, the price of bitcoin surpassed $110,000, reaching an industry milestone. As of 5 p.m., it traded at $111,131, marking a 4.31 percent gain from 24 hours earlier.
In Korea, bitcoin traded above 154 million won on the nation’s largest crypto exchange, Upbit, as of 5 p.m. It traded similarly on Bithumb, the second-largest crypto exchange here. Earlier in the day, the cryptocurrency inched up to 155 million won, but reversed some of the gains in the following trading hours.
Bitcoin previously peaked at roughly 160 million won on the local market in March, before it fell to as low as the 110 million won range in April, as risk aversion grew with the US tariff policy creating market uncertainty.
Cryptocurrency exchanges in Korea operate in a relatively isolated environment from the global trading market, as they are restricted to trading exclusively in Korean won, creating the “kimchi premium” — the price gap between the cryptocurrency's value in Korea and international markets.
On Thursday, the kimchi premium fluctuated at below 1 percent as of press time, meaning trading prices in Korea were slightly more expensive than elsewhere.
Though the price gap remains relatively stable compared to when it was pushed to nearly 10 percent in February, experts pointed out that it has widened in recent days with gains in the Korean won. Theoretically, the kimchi premium strengthens when the won gains value.
“The price discrepancy has widened from minus 1 percent to plus 1 percent, meaning the kimchi premium has strengthened,” said Kim Min-seung, head of research at Korbit, one of Korea's top five cryptocurrency exchanges.
“But there are various factors impacting the kimchi premium. It does not always move in accordance with currency fluctuations. It is difficult to pinpoint a single reason that drives or weakens the phenomenon."
silverstar@heraldcorp.com
