South Korea’s bitcoin 'kimchi premium' soars to 10-month high amid Trump-led tariff war concerns

South Korea’s bitcoin kimchi premium hit a 10-month high as bitcoin on South Korean exchanges remained relatively steady amid a broader crypto sell-off.

According to data from CryptoQuant, kimchi premium hit 9.7% for bitcoin at around 2 a.m. on Monday in South Korea. This marks the highest South Korean premium since April 14, 2024, when the premium rose above 13%. It has since moved down to 8.24% at the time of writing.

Kimchi premium refers to the price percentage gap when bitcoin (or other cryptocurrencies) is trading higher in South Korean exchanges than elsewhere. 

Such premium stems from the South Korean crypto market being closed off to foreign investors, while local investors who buy large amounts of crypto from foreign exchanges for arbitrage may be punished under capital controls regulations. 

“The Kimchi Premium typically rises in bull markets when Korean investors bid higher, but it can also spike during periods of panic selling,” said Presto Research Analyst Min Jung. “This occurs when selling pressure is lower on Korean exchanges compared to global markets.”

Over the weekend, U.S. President Donald Trump announced severe tariffs on imported goods from Canada, Mexico and China, resulting in growing concerns from investors about a prolonged “trade war” and its subsequent impact on U.S. inflation.

The crypto market saw over $2.1 billion in liquidations in the past 24 hours, according to Coinglass data .

“If selling pressure among US investors persists, the premium could remain elevated,” Jung said. “However, historically, the Kimchi Premium has averaged around 5%. If the market stabilizes and rebounds, we would likely see the premium narrow back toward that level.”

Though local regulations are comparatively stricter, South Korea hosts one of the most active crypto markets in the world, with a heavy focus on altcoin trading. 

According to The Block’s data dashboard , South Korea’s Upbit was the fourth-largest centralized exchange by monthly volume, processing over $187 billion in transactions in January.