Bitcoin’s Kimchi Premium is on fire, hitting levels not seen in months. This metric, tracking the price gap between Bitcoin on South Korea’s Upbit exchange and Coinbase, has jumped to 3-5%, according to data from CryptoQuant.
This means one thing: South Korean investors are pouring into Bitcoin like it’s their last lifeline. And why wouldn’t they? The country is a boiling pot of political chaos, economic anxiety, and financial uncertainty.
South Korea’s troubles are stacking up. President Yoon Suk Yeol pulled the country into a tailspin earlier this month with a disastrous martial law declaration that lasted just six hours. By mid-December, the National Assembly impeached him.
Then came another shock—acting President Han Duck-soo was booted out by parliament, making history as the first acting leader to face impeachment. While politicians play musical chairs, the South Korean won isn’t holding up—it’s down 0.35% against the U.S. dollar.
South Korean investors flock to Bitcoin amid turmoil
Crypto fever is nothing new in South Korea, but the current one is quite different. The Kimchi Premium, named after the iconic Korean side dish, has always been a telltale sign of retail investor demand. Right now, it’s screaming demand.
According to Ki Young Ju, CEO of CryptoQuant, the country’s economic problems are driving wealth outflows like never before. “Inflation fears are making people convert their won into U.S. dollars, Bitcoin, and gold,” Ju said.
And here’s the thing, most of South Korea’s crypto activity comes from individual investors because corporate accounts are banned on local exchanges.
But this isn’t just about people ditching banks for crypto exchanges. It’s also about South Korea’s strict currency controls and anti-money laundering rules, which push up premiums.
Local exchanges often see trading volumes higher than stock markets. Stablecoins like Tether’s USDT are also part of the story. Tether’s premium has climbed alongside Bitcoin’s.
The $200k Bitcoin forecast
While South Korea is a hotbed for Bitcoin activity, the bull run is global. Analysts are predicting that Bitcoin could hit $200,000 by the second quarter of 2025.
Bitwise CIO Matt Hougan said, “The record-setting flows into bitcoin ETFs sent bitcoin to new all-time highs in 2024. We don’t see that slowing down any time soon. Combine that demand with the reduction in new supply thanks to the April 2024 halving, plus new buying from corporations and governments.”
Then there’s the Trump factor. The president’s promise of regulatory clarity is music to the ears of institutional investors. Analysts believe the new administration will focus on crypto legislation, including market structures and stablecoins, potentially reshaping the industry.
“The election was a huge breakthrough,” said Zach Pandl of Grayscale Investments. “The regulatory environment for crypto is about to change dramatically.”
But it’s not all sunshine and rainbows. The Federal Reserve’s recent signals about fewer interest rate cuts in 2025 have tempered some of the enthusiasm. Still, many believe the incoming administration’s support will outweigh these macroeconomic headwinds.
Ethereum is getting there too
Bitcoin might be the star, but it’s not the only one getting attention. Ethereum is getting ready for a major comeback, and institutions are taking notice. Juan Leon of Bitwise called Ethereum “the king of tokenization,” pointing to its dominance in bringing real-world assets onto blockchains.
With its long track record and regulatory clarity, Ethereum is becoming a go-to for Wall Street. Pandl thinks Ethereum will be the bridge between traditional finance and crypto. “What you’re going to see next year is more traditional finance integration with Ethereum,” he said.
And it doesn’t stop there. A pro-crypto administration would likely start a stablecoin boom, with Ethereum sitting at the center of it all. Meanwhile, Coinbase is eyeing a major milestone: inclusion in the S&P 500. If that happens in 2025, it would contribute to the $200k surge.
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