The year had started in slow motion for Bitcoin, as the leading digital assets couldn’t build on the momentum it ended 2020 with. Fortunately, as the year started to shape up, the digital asset started to witness an upturn in fortune, and its price begins to hit new ATHs. However, the cryptocurrency has continued to hover around the $60K mark, as the digital asset has refused to hit a new all-time high since early March. Surprisingly, the digital assets are now trading at an ATH of $66,600 in South Korea, as the Capital Controls in the Asian country have now pumped its price locally.
Bitcoin is currently scarce in South Korea
At the time of writing, the digital asset is currently trading at $58,673. Surprisingly, according to the data from two of the largest crypto exchanges in Korea- Bithumb and Korbit, the digital asset’s price is around $66,000, which is a figure BItcoin has never traded on the global market. However, the reason behind the 16% increase in price on the South Korean crypto market is because the Asian country’s crypto exchanges do not have enough digital assets to cater to the demand.
The scarcity of Bitcoin in the country is believed to be a result of capital flows restriction by financial regulators in the country. International trading restrictions with the country’s official currency- Won, is believed to be one of the primary reasons why the crypto exchanges in the country cannot purchase good Bitcoin from the global market to cater to the South Korean market. Before now, many traders and business owners in the country have been complaining about the difficulty of foreign trade exchange with the nation’s currency, as the nation’s government has made it difficult for the currency to leave the nation’s shores.
High demands Vs. Scarcity
Another problem behind the price increase of Bitcoin in South Korea is the high demand levels of the cryptocurrency. The demand levels of Bitcoin have surged so high that almost every well-known investor in South Korea wants to possess Bitcoin in their custody. According to a survey in the country by crypto data analytics firm-DewMist, about 33% of South Koreans own Bitcoin, a figure that almost close to 50%, as of today.
Around January 2018, the digital assets traded above 47% of their value in the country, amidst high demands and low availability in the country. The household name that explains the current scenario in the South Korean Blockchain market is called- the Kimchi Premium. The Kimchi Premium is top-rated in South Korea, as it is always used by traders when there are high demand and scarcity.
Many traders have depended on the Kimchi method to maximize profits, much to the detriment of the citizens who have to pay inflated prices for goods and services. However, despite the inflated price of Bitcoin in the country, Bitcoin is performing well on the global market. Despite not hitting a new ATH on the global market, the digital asset is close to the $60K mark.