The number one and number two crypto assets by market capitalization are currently trading at a high premium on South Korean exchanges. Bitcoin sells nearly $ 800 more than the rest of the world and Ether around $ 20 more.
When such a premium occurs, traders can usually make up the price difference quickly. However, this may take longer than usual due to regulations introduced in the nation last year.
South Korean bitcoin exchanges are an arbitrage trader’s dream right now. So where are they?
As mentioned earlier, Bitcoin is currently trading on many crypto asset exchanges in South Korea at around $ 800 more than anywhere else. Buying a whole bitcoin would cost more than $ 12,600 on almost all of the major exchanges in the country.
The situation is similar with the second largest crypto asset, Ether – the native asset of the Ethereum network. The price of a single ETH token in South Korea at the time of writing is $ 20 higher than globally. While Ether is currently trading at around $ 305 on Coinbase or Bitfinex, for example, it is listed at $ 325 or more on South Korean stock exchanges.
Given the fragmentation and volatility of the crypto markets, there are always opportunities for profit with very little risk. Typically traders rush to take advantage of selling high and buying low at the same time – arbitrraging. However, this has not yet been the case with the South Korean stock exchanges.
One theory as to why the price differential has not yet been eliminated is that recent new regulatory measures have resulted in the pool of potential traders willing (or even able) to get the business needed to be far smaller than that before.
To broker trading between crypto exchanges, one would need an account on the exchange with the low price and the South Korean venue where such a bitcoin premium can be observed. The recently introduced regulations stipulate that switching accounts must be created personally through a user’s bank account. The country’s regulators have given the go-ahead for banks and exchanges to work together, provided the latter can demonstrate solid monitoring by local KYC and AML regulators. This is certainly a boon to the country’s digital wealth industry, but it does severely limit access to the market and price rewards have a greater chance of not being vetted for longer.
Obviously, there is currently a lot of demand for Bitcoin and other crypto assets from South Korea. UpBit, the country’s leading exchange by trading volume, reported a reported half a billion dollars in the past 24 hours alone.
A report in Trust Nodes supports the idea that South Koreans are starving for cryptocurrency again. The release alleges that an employee of one of the country’s banks complained about the extra work being done due to regulatory requirements and the sheer number of people recently trying to open trading accounts on one of the country’s crypto exchanges was required of them.
Related reading: South Korean Bitcoin exchanges are seeing the highest influx of fiat
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