The kimchi premium represents the difference between bitcoin’s price on South Korean exchanges and the going rate on other global trading platforms.
The reasons for the discrepancy are complicated but partially result from limitations unique to the country’s exchanges. They also stem from the explosive growth in trading amid volatility combined with the country's political system’s inability to keep up with its citizen’s fast-paced cryptocurrency adoption. South Korea is a global leader in the cryptocurrency market and is responsible for more trading per capita than any other country in the world. In 2021, South Korea’s premiums have allowed experienced opportunists to capitalize on their multicultural expertise.
That being said, executing a Spatial Arbitrage strategy by buying bitcoin on western exchanges and selling on Korean exchanges at a higher price is quite challenging.
The complexity in taking advantage of the kimchi premium, discourages foreign investors from engaging in the practice. This is because the investor must open a limited foreign bank account in South Korea that has strict withdrawal limits and transaction fees. To perform crypto arbitrage in this fashion, you need the right set of tools, expertise, and experience. Without this, it is close to impossible to take advantage of this opportunity.
However, If you are not hesitant to take action on profitable opportunities, you can earn a decent profit from arbitrage. With recent advancements in technology, our computerised trading software monitors price fluctuations 24/7, and trades are executed almost instantaneously. To be able to recognise differences across various exchanges, you need to access multiple listings at once. Our trading bots buy and sell cryptocurrencies quickly from multiple exchanges and perform crypto arbitrage as the transactions are completed. Which means everything is done within 30 minutes. Our preparation has built an effective framework for global investors to take advantage of this premium.
The technological & economic realities shaping our future today no longer bind us to mediocrity, they empower us to achieve consistent excellence.