As of May 12, bitcoin price in the South Korean exchange market is $2,076, approximately 12.7 percent higher than that of the global average price. To be exact, bitcoin is being traded on South Korean exchanges and trading platforms at a price that is $269 higher than the global average price of $1,807.
Ever since the debut of venture capital backed and regulated bitcoin exchanges including Korbit and Bithumb, the South Korean bitcoin exchange has presented excellent arbitrage opportunities for traders. South Korean bitcoin exchange have always demonstrated a high premium on their listed bitcoin prices and trading rates.
BTC/KRW chart from Korbit.
Such arbitrage opportunities were investigated by traders and cryptocurrency researchers by as early as 2015. In an analysis piece entitled “Investigating the Great Korean Bitcoin Arbitrage Opportunity,” a trader wrote:
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“This kind of gap exists in other markets too, but the South Korean situation is atypical because it’s by no means a small or immature market. The trading volume on Bithumb (the larger of the two exchanges, with nearly twice the depth of its competitor Korbit) during the last 30 days has never dropped below 1,390BTC, with an average of about 3,000BTC (and a high of over 6,000).”
Considering that the South Korean exchange market is mature and developed, which is quite evident considering that it is the fourth largest bitcoin exchange market behind Japan, the US and China, one explanation that could rationally justify arbitrage opportunities and high premium bitcoin prices listed by local bitcoin exchanges is the presence of strict Know Your Customer (KYC) and Anti-Money Laundering (AML) policies.
According to bitcoin researcher Cryptonight, the author of the above-mentioned analytical blog post, South Korean
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