Kimchi trade, & its spicy "premium" ๐ถ๏ธ
one more, in the series of " when food meets economics. "
A little kimchi, never did any harm!
To all the fans of kimchi and soju, and the K-Pop loyalists, hereโs another interesting term from the house of South Korea! A short explainer on two very popular terms; โ Kimchi Trading โ & โ Kimchi Premium โ
What is Kimchi Trading? Where is Kimchi Trading?
The term is a play on the word "kimchi," which is a popular fermented vegetable dish in Korean cuisine, and the fact that the South Korean stock market is often seen as a volatile and unpredictable place to invest.
Kimchi trading describes the practice of South Korean investors using the profits they make from the stock market to invest in cryptocurrencies.
Can you describe Kimchi Premium ?
The kimchi premium is the term used to describe the difference in value between cryptocurrencies traded on South Korean exchanges and those traded on exchanges in other countries. This difference is often attributed to the strong demand for cryptocurrencies in South Korea, as well as the strict regulations that the South Korean government has put in place to control the trading of cryptocurrencies. The kimchi premium can sometimes be quite significant, with the value of cryptocurrencies on South Korean exchanges being much higher than on other exchanges.
What does this mean in simple words?
Imagine that you have a gadget that you really like, and you think it's worth a lot of money. But in another country, people don't value the gadget as much as you do. So if you were to sell your gadget in that other country, you might not get as much money for it as you would if you sold it in your own country.
In South Korea, people are willing to pay more for certain cryptocurrencies than people in other countries. So if you have one of those cryptocurrencies and you sell it in South Korea, you might be able to get a higher price for it than you would if you sold it somewhere else.
So why does this exist ? Why does this happen ?
โ Simple, high demand for cryptocurrencies in South Korea, and not enough supply to meet that demand.
This can cause the price of cryptocurrencies to be higher
โ Another reason is that the Korean government has placed some restrictions on the use of cryptocurrencies, which can make it harder for people in the country to buy and sell them.
โ Finally, we anyway know that the value of cryptocurrencies can fluctuate widely and can be influenced by a variety of factors, including market demand, , and overall economic conditions.
So it's possible that the Kimchi premium may not always exist, or may vary in size over time, stay tuned folks!
P.S: Something thatโs certain?
You learning new stuff!
All you need to do โ