South Korea, the BTC pump and the household credit problem

[deisik]

Look at the prices of BTC in all the different exchanges and take notice of the higher price in the Korean exchanges. It was trading at a $2000 premium this week and has lowered to a $1000 premium.

Why? Could there be an ongoing capital flight happening? Their household debt is totaling $1.2 trillion. An all time high

I guess you should first look for simpler explanations

As said before, these exchanges may be locked in, and if you can't deposit or withdraw fiat to and from them (or fees for these operations are insane), you should expect such rates. The same happened at Bitfinex recently. They also had (and still have, if I'm not mistaken) problems with fiat transfers (Taiwanese banks closing payment channels for the exchange), and voila, Bitcoin is traded at an over 100 dollar premium to other exchanges. If you want to find out whether this has anything to do with capital flights, you could as well look at official exchange rates versus black market rates (e.g. Korean Won against the US dollar). If these rates are essentially the same (or there is no black market), then this discrepancy has nothing to do with capital flight

Yeah youre right! I learned something new again today. I havent done some checking online yet but do you know where to find the rates for US dollars in the black market? Assuming those rates arent available anywhere then it would hard to know if it has something to do with capital flight for sure.

I don't really know if a currency black market exists in SK at all

Obviously, I don't live there so I can't possibly know for sure. But if there are some currency controls imposed which aim at stopping capital flight, you can be sure there will be one. Capital flight usually happens when the economic situation in a country is really dire, and that in most cases means that the government will be limiting currency exchange (such things are well correlated if not in the same causal chain). If you are really curious, you may want to ask in the Korean section of the forum (provided there is one, of course). Personally, though, I'm more inclined to think that so high Bitcoin exchange rates at Korean exchanges are due to some locally imposed limitations and restrictions on fiat withdrawals (or due to some issues like those at Bitfinex)

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[Palodar]

Look at the prices of BTC in all the different exchanges and take notice of the higher price in the Korean exchanges. It was trading at a $2000 premium this week and has lowered to a $1000 premium.

Why? Could there be an ongoing capital flight happening? Their household debt is totaling $1.2 trillion. An all time high.

http://pulsenews.co.kr/view.php?year=2017&no=344490

Another reason for an ongoing capital flight scenario is the concerns over South Korea's face off against North Korea.

http://ecard.nationmultimedia.com/news/business/EconomyAndTourism/30312620

Maybe theyre using BTC to get money out of their country to bypass the banking system and the regulators that makes it hard to move money.

Or it could be just ordinary Koreans taking a fancy to Bitcoin.
We know that there is increased interest in Japan following favourable regulations; maybe this has spread to South Korea too. 

With the buzz surrounding bitcoin in Japan right now, it is no surprise that South Korea isn't far behind because of the growing demand and the sudden surge in interest, even if they have to pay a premium. What's even more amazing is that it is not only limited to bitcoin in South Korea as the demand for ethereum and ripple has also been picking up.

Since Korea also open in bitcoin transactions and fond on investing a lot in btc that can cause pump in near future its a good way to Asian country to start to adopt btc to benefit their people.

[andrei56]

This are some of the disadvantages of crypto currencies as an anonymous transactions. Bitcoin and crypto currencies in general did not allow the government to ascertain the capital flight, money in circulation and the ability to spend. I am an advocate of removing anonymous transactions from bitcoin features.

There are not anonymous transactions in bitcoin, there are pseudonymous transactions, if you want to increase the degree of privacy you will need to take measures like tumbling your coins, also I disagree with your position bitcoin was created to fight government control over us and you want bitcoin to be regulated like that, to me that does not make sense.

[pinkflower]

Look at the prices of BTC in all the different exchanges and take notice of the higher price in the Korean exchanges. It was trading at a $2000 premium this week and has lowered to a $1000 premium.

Why? Could there be an ongoing capital flight happening? Their household debt is totaling $1.2 trillion. An all time high

I guess you should first look for simpler explanations

As said before, these exchanges may be locked in, and if you can't deposit or withdraw fiat to and from them (or fees for these operations are insane), you should expect such rates. The same happened at Bitfinex recently. They also had (and still have, if I'm not mistaken) problems with fiat transfers (Taiwanese banks closing payment channels for the exchange), and voila, Bitcoin is traded at an over 100 dollar premium to other exchanges. If you want to find out whether this has anything to do with capital flights, you could as well look at official exchange rates versus black market rates (e.g. Korean Won against the US dollar). If these rates are essentially the same (or there is no black market), then this discrepancy has nothing to do with capital flight

Yeah youre right! I learned something new again today. I havent done some checking online yet but do you know where to find the rates for US dollars in the black market? Assuming those rates arent available anywhere then it would hard to know if it has something to do with capital flight for sure.

I don't really know if a currency black market exists in SK at all

Obviously, I don't live there so I can't possibly know for sure. But if there are some currency controls imposed which aim at stopping capital flight, you can be sure there will be one. Capital flight usually happens when the economic situation in a country is really dire, and that in most cases means that the government will be limiting currency exchange (such things are well correlated if not in the same causal chain). If you are really curious, you may want to ask in the Korean section of the forum (provided there is one, of course). Personally, though, I'm more inclined to think that so high Bitcoin exchange rates at Korean exchanges are due to some locally imposed limitations and restrictions on fiat withdrawals (or due to some issues like those at Bitfinex)

Or maybe there are smart people working in financial institutions that know what will happen months or years from now? Like how the housing bubble was anticipated by a guy who worked in a hedge fund and started betting against those rated AAA derivatives.

[deisik]

Look at the prices of BTC in all the different exchanges and take notice of the higher price in the Korean exchanges. It was trading at a $2000 premium this week and has lowered to a $1000 premium.

Why? Could there be an ongoing capital flight happening? Their household debt is totaling $1.2 trillion. An all time high

I guess you should first look for simpler explanations

As said before, these exchanges may be locked in, and if you can't deposit or withdraw fiat to and from them (or fees for these operations are insane), you should expect such rates. The same happened at Bitfinex recently. They also had (and still have, if I'm not mistaken) problems with fiat transfers (Taiwanese banks closing payment channels for the exchange), and voila, Bitcoin is traded at an over 100 dollar premium to other exchanges. If you want to find out whether this has anything to do with capital flights, you could as well look at official exchange rates versus black market rates (e.g. Korean Won against the US dollar). If these rates are essentially the same (or there is no black market), then this discrepancy has nothing to do with capital flight

Yeah youre right! I learned something new again today. I havent done some checking online yet but do you know where to find the rates for US dollars in the black market? Assuming those rates arent available anywhere then it would hard to know if it has something to do with capital flight for sure.

I don't really know if a currency black market exists in SK at all

Obviously, I don't live there so I can't possibly know for sure. But if there are some currency controls imposed which aim at stopping capital flight, you can be sure there will be one. Capital flight usually happens when the economic situation in a country is really dire, and that in most cases means that the government will be limiting currency exchange (such things are well correlated if not in the same causal chain). If you are really curious, you may want to ask in the Korean section of the forum (provided there is one, of course). Personally, though, I'm more inclined to think that so high Bitcoin exchange rates at Korean exchanges are due to some locally imposed limitations and restrictions on fiat withdrawals (or due to some issues like those at Bitfinex)

Or maybe there are smart people working in financial institutions that know what will happen months or years from now? Like how the housing bubble was anticipated by a guy who worked in a hedge fund and started betting against those rated AAA derivatives

And what does it have to do with Bitcoin?

It looks like you are desperately looking for proofs that would confirm your theory. If the facts don't fit in very well, all the worse for the facts. If some people are trying to earn on the future collapse, Bitcoin wouldn't be not very useful vehicle for that. They would obviously use more reliable tools like the US dollar. If you think that this is where capital flight restrictions kick in, that could be instantly proved by the black market arising for currency exchange operations (or disproved by the lack of one). If there is none (I don't know), maybe, your theory is not as good as it seems to you?

[bartolo]

The Korean government is taking measures in favor of bitcoin, for example, it lowered the equity capital required for companies focusing on Bitcoin remittances, so it wouldn´t be surprising that many of the investors were big companies. It seems clear that the demand for bitcoin is very high there. The difference in price with the rest of the world is striking but surely for these companies it will be easier to buy bitcoin in their country, even being more expensive. Perhaps commissions for banking transactions outside the country are very high.

[pinkflower]

And what does it have to do with Bitcoin?

It looks like you are desperately looking for proofs that would confirm your theory. If the facts don't fit in very well, all the worse for the facts. If some people are trying to earn on the future collapse, Bitcoin wouldn't be not very useful vehicle for that. They would obviously use more reliable tools like the US dollar. If you think that this is where capital flight restrictions kick in, that could be instantly proved by the black market arising for currency exchange operations (or disproved by the lack of one). If there is none (I don't know), maybe, your theory is not as good as it seems to you?

Bitcoin does have a good part to play in the whole scenario of capital flight, assuming its that, because its easy to move large amounts out of the country without alerting the banks.

Im not desperate to prove my theory. Its more like because all of the Korean exchanges are overpricing all cryptocurrencies, not just BTC, and I find that weird. Im merely questioning why.

[farharhadi]

Good news for bitcoin development, if many countries officially use bitcoin then prices will skyrocket to high and never go down like never before in some countries.

[deisik]

And what does it have to do with Bitcoin?

It looks like you are desperately looking for proofs that would confirm your theory. If the facts don't fit in very well, all the worse for the facts. If some people are trying to earn on the future collapse, Bitcoin wouldn't be not very useful vehicle for that. They would obviously use more reliable tools like the US dollar. If you think that this is where capital flight restrictions kick in, that could be instantly proved by the black market arising for currency exchange operations (or disproved by the lack of one). If there is none (I don't know), maybe, your theory is not as good as it seems to you?

Bitcoin does have a good part to play in the whole scenario of capital flight, assuming its that, because its easy to move large amounts out of the country without alerting the banks

And how are you going to do that?

You would still have to move fiat to these exchanges anyway, so you can't possibly not alert banks unless you move crypto in and crypto out (or just dust). But in that case the whole idea is meaningless. Bitcoin is not very handy because, as I just said, you still have to use banks, and, the point is, you can't secure wealth worth millions of dollars this way. I don't think that the Korean Bitcoin exchanges have that level of liquidity. It looks more like you are searching in the wrong place for the wrong causes (at least, in respect to premiums paid on these exchanges)

[pinkflower]

And what does it have to do with Bitcoin?

It looks like you are desperately looking for proofs that would confirm your theory. If the facts don't fit in very well, all the worse for the facts. If some people are trying to earn on the future collapse, Bitcoin wouldn't be not very useful vehicle for that. They would obviously use more reliable tools like the US dollar. If you think that this is where capital flight restrictions kick in, that could be instantly proved by the black market arising for currency exchange operations (or disproved by the lack of one). If there is none (I don't know), maybe, your theory is not as good as it seems to you?

Bitcoin does have a good part to play in the whole scenario of capital flight, assuming its that, because its easy to move large amounts out of the country without alerting the banks

And how are you going to do that?

You would still have to move fiat to these exchanges anyway, so you can't possibly not alert banks unless you move crypto in and crypto out (or just dust). But in that case the whole idea is meaningless. Bitcoin is not very handy because, as I just said, you still have to use banks, and, the point is, you can't secure wealth worth millions of dollars this way. I don't think that the Korean Bitcoin exchanges have that level of liquidity. It looks more like you are searching in the wrong place for the wrong causes (at least, in respect to premiums paid on these exchanges)

Ok. Thanks for the feedback.So would it be safe to assume that its all just speculation and nothing but hype? Why would they pay for such a premium unless fiat withdrawals are not allowed just like what happened to BFX.