Bitcoin Surge Sees Crypto Trading Volumes Exceed the Stock Market in South Korea

Rising bitcoin (BTC) prices have revived a crypto trading frenzy in South Korea, with volumes on local exchanges crossing those in the local stock market last week.

Local media reported that trading volumes on South Korea-based crypto exchanges totaled a record 11.8 trillion won (KRW) on Sunday, or $9 billion at the going USD-KRW exchange rate. These topped Friday’s South Korean stock trading volume of 11.47 trillion won, or $8.7 billion.

This figure is the combined transaction amount of Korea's five largest won markets, including Upbit (8.8 trillion won), Bithumb (2.7 trillion won), Coinone (176.4 billion won), Gopax (55.2 billion won), and Coinone (32 billion won).

The top five crypto markets on Upbit were the won-traded pairs of bitcoin (BTC), space id (ID), IQ Protocol's IQ, 0x's ZRX and shiba inu (SHIB).

Local market observers said that a relatively bigger volume in the crypto market increased risk tolerance among Korean investors.

“Koreans favor high-risk, high-return investments because they experienced a rapidly growing economy,” shared Ki Young-Ju, founder of on-chain provider CryptoQuant, in a message. “With the increasing wealth gap, more people are turning to such investments, with altcoins being the preferred choice over major assets like BTC or ETH.”

The high volumes occur despite bitcoin, ether, and other tokens trading at a higher markup on Korean exchanges than on their global counterparts, indicating strong retail demand.

“The kimchi premium is at its highest since the Luna crash in May 2022,” shared Bradley Park, Web3 analyst at CryptoQuant, in a message. “It is often seen as a sign of strong retail demand, as Korean investors are willing to pay a premium for Bitcoin.”

“Upbit's daily trading volume has remained high since March after reaching 60K. It further supports the evidence of retail inflow,” Park added.

The "Kimchi premium" refers to the difference in Bitcoin prices on Korean exchanges compared to global bourses. Bitcoin is trading at a 10% premium in South Korea – opening a profitable but operationally complex arbitrage involving buying bitcoin on an international exchange and selling it on a Korean exchange for a riskless profit in Korean won.