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The political crisis in South Korea has pushed up the so-called Kimchi Premium to a four-month peak.
The surge in Bitcoin interest among South Korean investors coincides with escalating political turmoil in East Asia.
According to CryptoQuant data, the Kimchi Premium, which is the difference in price between Bitcoin on South Korean exchange Upbit and global crypto exchange Coinbase, rose by 3-5% last week.
When the indicator goes up, it usually means that Bitcoin is in high demand from investors in South Korea.
There was also demand for Tether, with a similar indicator for the stablecoin showing a comparable spike.
Ki Young Ju, founder and CEO of CryptoQuant, said, "South Korea faces an unprecedented wealth outflow amid political turmoil, declining birth rates, and slowing growth."
He added, "Inflation fears drive conversions of won assets into US stocks, Bitcoin, gold, and dollars. Many crypto investors prefer exchanges over banks, with Tether and Bitcoin trading at 2-5% premiums."
On X, he posted a chart to drive that point.
Live Chart 👇https://t.co/X5Lwu80Lb7
— Ki Young Ju (@ki_young_ju) December 27, 2024
The political environment of South Korea was completely disrupted by President Yoon Suk Yeol's regrettable declaration of martial law earlier this month, which was subsequently reversed after only six hours.
Blockhead
The National Assembly swiftly impeached Yoon on December 14, and he was subsequently suspended from his duties.
Prime Minister Han Duck-soo was designated as the acting president.
The latest development is that the parliament also decided to impeach Han on Friday, marking the first time an acting president has been impeached in the nation.
The situation has caused financial markets to tremble, and South Korea is currently facing both heightened economic difficulties and nuclear threats from North Korea.
The Korean won and bonds fell in value. The insurance against a default on Korea's sovereign bonds surged as the political crisis continues to exacerbate investors worries.
The volume of crypto exchanges in Korea regularly outstrips that of stock exchanges, making South Korea a prime example of a cryptocurrency retail market.
Korean cryptocurrency exchanges do not permit the establishment of corporate accounts, meaning that the vast majority of South Korean crypto activity comes from individual investors.
