Kimchi Premium
The gap by which Bitcoin and other coins trade higher on South Korean exchanges than elsewhere.
Named after the Korean staple, the premium measures how much more a coin costs on exchanges like Upbit and Bithumb versus the global average. During the 2017 mania it blew out past 50% on some coins.
It persists because capital controls and banking rules make it hard to move money in and out of Korea fast enough to arbitrage the gap away. A wide premium signals intense local demand; a negative one, the 'kimchi discount,' shows the opposite. Traders watch it as a rough gauge of retail froth in a major market.
Related terms
Profiting from the same asset trading at different prices in two places by buying low and selling high.
FOMO (Fear of Missing Out)The urge to buy an asset because its price is climbing fast and you dread missing the gains.
Centralized Exchange (CEX)A company that runs an order book, holds your funds, and matches buyers with sellers for a fee.
VolatilityA measure of how sharply and how often a price swings, in either direction, over time.