[Asia Economy Reporter Gong Byung-sun] Global cryptocurrency exchange Huobi Korea has raised a warning about the recently growing Kimchi Premium.
On the 9th, Huobi Korea announced that it sent a cautionary message to cryptocurrency investors amid the ongoing overheating phenomenon of the Kimchi Premium exceeding 10%.
The Kimchi Premium refers to the price gap of cryptocurrencies between domestic and overseas markets. Huobi Korea explained that as Bitcoin has continued its upward trend for seven months, the influx of new cryptocurrency investors has increased, showing signs of overheated investment.
In the case of domestic cryptocurrency exchanges, order books are not shared with overseas markets, allowing price adjustments without being influenced by overseas prices. Because of this, domestic investors may buy at higher prices on domestic exchanges without recognizing the premium.
Choi Jin-young, a researcher at Huobi Korea, said, “The Kimchi Premium still maintains the 10% range, and if the volatile market continues, there is a risk of a sharp decline,” adding, “As overheated investment persists, domestic investors are advised to compare prices with overseas exchanges before making purchases.”
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
