My opinion on Kimchi Premium in South Korea

[SillyCat]

This is merely my opinion on some happening in South Korea so I am open to any critiques and new ideas.

Some of you may have heard of "Kimchi Premium" which stands for a premium price that occurs in the South Korean exchanges, having a higher bitcoin price than that of other exchanges due to the unique culture characteristics of South Korea (I will explain about that later) and the Government ban of creating new accounts in Bithumb (no.1 exchange in Korea in terms of volume)

This premium is now sitting at 7% gap from 40% gap and I personally think this is a good thing because the bitcoin price should not have been that high in a short period of time in the first place. This is due to the national characteristic of South Korea that the people are very sensitive to news from neighbors and they usually act together. You all remember when the bitcoin price was up by 15% everyday last year late December? the price went up from 6000$ to 12000$ in less than 2 weeks or so. I am 100% sure that most of the (I assume 1 out of 10) Korean housewives sold their cars, dogs, gold bars or whatever to jump in.

You guys may not know about the situation in Korea but these days a lot of government regulations started to kick in; they will pay tax for their earnings, have to verify their ID, report to the government in case of sending a huge amount of coins (I am not sure about the exact limit). All these regulations seem to dilute some of the innate characteristics of Bitcoin but I don't think it's a big problem.

I personally like the idea of regulations because this also means that the government ,instead of banning it like the Chinese Government, is setting up measures to protect the people for the good. It will be now similar to the stock market. Once all these happenings settle down in the coming months, I speculate that the price of bitcoin will start to take off.

These were just some of my thoughts and I hope you guys enjoyed it.

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[hopingman05]

The price can take off only if the percentage of investors from S Korea is big enough. Anyhow, this seems a good sign that the governments are willing to accept this currency.

[SillyCat]

The price can take off only if the percentage of investors from S Korea is big enough. Anyhow, this seems a good sign that the governments are willing to accept this currency.

You know it was big and still is. I just hope that the S Korean should know what blockchain is and what they are doing before their investments.
There are so many who just freaking throw their money in just because the price is going up. I have seen many.

[alyssa85]

There is a premium in the South Korean exchanges because it's hard to arbitrage.

Normally, if say Bitstamp was trading higher than GDAX, people would sell coins on Bitstamp and buy them on GDAX, and as a result the price dfference would narrow.

It's impossible to do on the Korean exchanges because they don't let westerners join or send fiat to those exchanges.

[kim-yon]

Tax regulation means; It means the definition of the country. So I think positively. I think the tax is a bit high.

[SillyCat]

There is a premium in the South Korean exchanges because it's hard to arbitrage.

Normally, if say Bitstamp was trading higher than GDAX, people would sell coins on Bitstamp and buy them on GDAX, and as a result the price dfference would narrow.

It's impossible to do on the Korean exchanges because they don't let westerners join or send fiat to those exchanges.

That is a good point. I just don't know why the government would not let foreigners join because that created this mess.

[SillyCat]

Tax regulation means; It means the definition of the country. So I think positively. I think the tax is a bit high.

Exactly regulation means the government is accepting it with a protection measure and cultivating an investment friendly environment. That's what I am thinking but you know a lot of Koreans freaking panic and sell their coins because they think it's a bad thing for the government to step in and regulate.