Bitcoin Trade That Made Bankman-Fried Millions Makes a Comeback in South Korea

Crypto News- Bitcoin’s Lucrative ‘Kimchi Premium’ Resurfaces in South Korea: A Tale of Profit and Complexity In the bustling Asian markets, Bitcoin’s value soars to over $66,000, but in South Korea, it commands an impressive 10% premium, exceeding $71,000. This phenomenon, dubbed the ‘Kimchi premium’ after the beloved Korean dish, presents a tantalizing opportunity for savvy traders.

Bitcoin Trade That Made Bankman-Fried Millions Makes a Comeback in South Korea

The concept seems straightforward: buy Bitcoin on a global exchange, transfer it to a Korean platform, and pocket the risk-free profit. However, navigating the operational hurdles proves daunting. South Korea’s strict capital controls and withdrawal limitations hinder large-scale capitalization on this arbitrage. Even smaller investors find it challenging to access the necessary infrastructure. Enter Sam Bankman-Fried, the mastermind behind Alameda Research and FTX exchange. During 2019 and 2020, Bankman-Fried capitalized on the Kimchi premium, reportedly earning his firm up to a million dollars a day. His success highlights both the potential and the complexities of this trade.

Yet, the Kimchi premium isn’t merely a financial opportunity; it’s a reflection of local demand and retail enthusiasm. According to Ki Young Ju of CryptoQuant, the premium serves as a barometer of retail FOMO (fear of missing out), indicating a resurgence of Korean retail investors. Indeed, recent data suggests a surge in Bitcoin reserves on Korean exchanges like Upbit, as traders exploit the arbitrage opportunity. As Bradley Park of CryptoQuant notes, the increasing premium incentivizes traders to repatriate their overseas holdings, fueling the rise in reserves. In essence, the resurgence of the Kimchi premium symbolizes not just profit potential, but also the intricate interplay between regulatory constraints, retail sentiment, and market dynamics in the world of cryptocurrency trading.