South Korea has been engulfed in a significant political crisis in recent weeks. The turmoil began with the removal of the speaker of the National Assembly and has now escalated with the dismissal of the Prime Minister. This complex political environment is affecting not only domestic politics but also South Korea’s Bitcoin market…
Bitcoin Chaos Arises Amid South Korea’s Financial Crisis
The “Kimchi Premium,” which reflects the price difference of Bitcoin on local exchanges compared to global prices, has seen a notable increase. This premium measures the extra amount South Korean cryptocurrency investors pay to acquire BTC compared to global users. The difference has widened as the crisis deepens.
In the past month, South Korea’s won has depreciated to its lowest level against the US dollar since 2009. This devaluation plays a key role in the rising Bitcoin Kimchi Premium. According to on-chain data from CryptoQuant, South Korean investors are paying 3% more for Bitcoin compared to the global average.
What’s Happening in South Korea?
The current political chaos in South Korea is being closely monitored by global markets. Jeff Park, Head of Bitwise’s Alpha Strategies division, examined the underlying reasons for the political unrest. Park noted that South Korea’s legislative body issued a motion to impeach Prime Minister and Acting President Han Duck-soo.
This decision came just two weeks after President Yoon Suk-yeol was removed from office. Yoon, who had been in power since May 2022, attempted to implement military rule to protect against “anti-state” forces during his tenure. This move involved transferring civilian authority to the military and suspending civil liberties, including freedom of speech and assembly.
Jeff Park emphasized that this situation serves as a crucial warning for democratic regimes worldwide. According to Park:
“Using impeachment as a political tool underscores the fragility of democracy. This is a threat not only to Korea but to democracies globally.”
The Cause Behind the Rising Bitcoin Kimchi Premium
In recent weeks, rumors surrounding the potential impeachment of South Korea’s Acting President have caused a sharp decline in the won’s value. As a result, cryptocurrencies traded on South Korean exchanges have surged above prices seen on global platforms. This disparity is mainly due to South Korea’s stringent capital control policies.
Currently, the price of Bitcoin on South Korea’s Upbit exchange stands at 144,450,000 won (approximately $98,000 USD), whereas the same amount of Bitcoin is priced at around $95,100 USD on Coinbase.
Bitcoin and Altcoin Trends in South Korea
Past analyses suggest that increases in the Kimchi Premium often signal bullish trends. However, despite the growing price gap, investors are quickly gravitating toward dollar-based assets. South Korea’s challenging economic conditions and the depreciation of the won are driving investors toward digital assets. Bitcoin, in particular, has emerged as a preferred safe haven. For more details on Bitcoin price predictions for 2025, refer to this article from Kriptokoin.com.
